The US authorities have supported oil prices, while gas prices are falling. So far, so good for blue gas in Europe: at $400 per thousand cubic meters. That’s twice as much as before the energy crisis. But that’s life. Competition for LNG has not disappeared, but the risks of Ukrainian transit remain. In Azerbaijan, there is talk that Europe wants Caspian gas, not Russian gas.
Oil
Oil-producing countries were able to breathe a little this week. Global prices have risen. Over the course of the week, the price of the North Sea Brent crude oil rose slightly from $71.9 per barrel to $74.7.
The market was encouraged after the US Federal Reserve cut rates by half a percentage point.
“Interest rate cuts in the United States supported risk sentiment, weakened the dollar and supported oil this week,” a UBS analyst told Reuters. Giovanni Staunovo“However, it will take time before rate cuts support economic activity and oil demand growth.”
The Federal Reserve predicts that borrowing money will continue to fall in price: the rate will continue to fall: another half percent by the end of the year, a percent next year, and another half percent in 2026.
“The Federal Reserve’s decision to cut interest rates and some hangover from Hurricane Francine are the only two things that are supporting the market at the moment,” — said Matador Economics’ chief economist Tim Snyder.
Gas
Gas prices in Europe continue to fall. Slowly. At the end of the working week, prices fell by another $6 to $409 per thousand cubic meters. At this price, deliveries are being offered for October at the TTF hub. The reasons remain the same. More gas reserves have been created in Europe, and the decline in demand is offset by a decline in LNG imports and preventive work in Norway.
“Despite the drop in prices in mid-September, there are significant concerns about the future dynamics of supply and demand. The situation is further complicated by increasing competition for LNG, particularly from Egypt, which has announced plans to purchase 20 cargoes of LNG starting in October, increasing competition in the market ahead of the winter season. This new demand, coupled with ongoing geopolitical uncertainty, keeps the natural gas market on edge,” writes ChemAnalyst.
The market also does not forget that on January 1, 2025, the transit contract for the transit of Russian gas through Ukraine will expire. However, as a senior Azerbaijani official told Reuters, the EU and kyiv are so far only asking Baku to intensify negotiations with Gazprom on one issue: that Azerbaijan buys Russian gas for itself in order to free up more fuel for Europe. Consultants from Energy Aspects Ltd believe that Gazprom and Azerbaijani Socar can take the path of financial exchange, however, EU and kyiv politicians may be against simply renaming Russian gas into Caspian gas.
If gas becomes cheaper, coal can only accept that its prices will also fall. Fuel supplies from the Antwerp-Rotterdam-Amsterdam (ARA) hub for the next month fell during the week from $114 per tonne to $112.
