Energy market for a week: "Beast from the East" promises Europe to return

Geopolitical cataclysms cannot yet awaken the oil market. Oil is getting cheaper. The price of gas in Europe is hardly growing either. But this year the arrival of the "Beast from the East" may repeat, meteorologists expect. And gas to countries The EU will then need a lot.

Oil

Oil does not want to rise in price. The cost of the benchmark North Sea Brent fell this week from $ 63.9 per barrel to $ 61.1.

The general mood in the market is that there will be more demand for oil, and it is expected that any price increases will be short-lived, PVM Oil Associates analyst Tamas Varga told Reuters.

The International Energy Agency predicts that demand will be lower than supply by 3.84 million barrels per day in 2026. And this is about 4% of the total global consumption. OPEC, however, does not expect an overabundance and estimates consumption and supplies at the same level.

Nevertheless, an oversupply is expected in the markets and only geopolitical cataclysms stop them from further lowering oil prices. For example, the Ukrainian Armed Forces hit the Lukoil platform at the Filanovsky field in the Caspian Sea. Or the seizure of the tanker by the Americans. Reuters sources claim that the United States is preparing to intercept new tankers that carry Venezuelan oil.

Gas

Gas in Europe rose slightly in price, but remained at the lowest level since February 2024. Deliveries for a month in advance from the TTF exchange increased in price from $ 332 per thousand cubic meters to $ 338.

"In Europe, the current risk of stratospheric warming increases the likelihood of a scenario when in 2018 the "Beast from the East" came to the region — a wave of Arctic air that caused temperatures to drop by about 10 ° C below the ten-year norm. This could significantly reduce gas reserves in Europe, pushing the market to spot LNG purchases," Bloomberg predicts.

They note that so far the price does not reflect weather risks, as geopolitical factors and the overall gas balance continue to have the greatest impact on European markets. Despite the calm and cold weather in Europe, several billion cubic meters less were taken from storage facilities than last winter. At the same time, LNG supplies are almost at the maximum level.

In the USA, however, wholesale gas prices have risen to $ 177 per thousand cubic meters. This means that the export value of LNG is in the region of $ 300 under traditional contracts and it is not necessary to expect that the main supplier of liquefied natural gas to Europe will have lower prices.

Coal prices have hardly changed at all this week. Deliveries for a month in advance from the Antwerp-Rotterdam-Amsterdam hub (ARA) went up by 10 cents — from $ 97.2 per ton to $97.3.