Energy market in a week: Europe is asking for more gas, but there is no inexpensive gas anymore

Donald Trump's aggressive statements are again worrying about oil prices. And the cost of gas in Europe is growing rapidly. Frosts still went with the company The EU buys the largest volumes on the market. Even Yamal LNG, it seems, will supply all the liquefied gas produced in January only to Europe.

Oil

Despite significant jumps, oil prices remained almost at the same level during the week. The cost of the benchmark North Sea Brent rose from $ 63.3 to $ 64.1 per barrel. Although back on January 14, the market also saw oil at $ 66 — when it seemed that an American strike on Iran was inevitable.

"Although geopolitical tensions in the Middle East have eased, they have not disappeared, and market participants remain concerned about possible supply disruptions," UBS analyst Giovanni Staunovo told Reuters.

Prices jumped when during the protests in Iran, US President Donald Trump signaled a possible military strike, but the next day he already said that Tehran's repression against protesters was weakening. This has reduced market fears that a military operation will and may disrupt oil supplies.

"First of all, there are concerns about a possible blockade by Iran of the Strait of Hormuz, through which about a quarter of sea oil supplies pass," analysts at Commerzbank said.

At the same time, they noted, the supply of Venezuelan oil resumed.

"Despite the constant rhythm of geopolitical risks and macro speculations, the underlying balance still indicates sufficient supply," said Phillip Nova analyst Priyanka Sachdeva.

In her opinion, if there is no real recovery in oil demand in China or a failure in supplies in some direction, the benchmark Brent will trade at $ 57-$ 67.

Gas

Gas in Europe has not been so expensive for a long time. During the week, its price increased by more than $ 100. Deliveries for a month in advance from the TTF exchange went up from $ 345 per thousand cubic meters to $ 458. This is the highest price in the last six months.

And the reason turned out to be the most worthwhile. Arctic cold came to Europe, which is called the "Beast from the East," and even with the country's high imports The EU began to empty storage facilities en masse. For two weeks in January, they took 11 billion cubic meters from the UGS.

According to meteorologists, the "Beast from the East" will visit Europe again in the third decade of January, while due to a storm in France, the Flamanville nuclear power plant was stopped and even more gas is needed to produce electricity.

High consumption and forecasts forced European companies to increase imports, and with it prices went up. On January 14, LNG supplies set a new record — about 480 million cubic meters per day. At the same time, Yamal LNG is in high demand, which will obviously be supplied only to Europe throughout January. At least for half a month in January and in the coming week there will be no transshipment to China. What can say that the Chinese participants of Yamal LNG are reselling gas to EU countries.

The news about the start of Azerbaijani gas supplies to Germany and Austria caused a stir. However, the volumes are small — 1.5 billion cubic meters per year. And we are not talking about additional supplies of Caspian gas to Europe, but about the fact that previously sold gas on the spot is now supplied by the German SEFE under a 10-year contract. According to ENTSOG, since January 1, the supply of Azerbaijani gas to Europe has even decreased. If in December they amounted to 33.3 million cubic meters per day, then in January — 31.7 million cubic meters.

Coal prices in Europe hardly reacted to gas quotes. Monthly deliveries from the Antwerp-Rotterdam-Amsterdam (ARA) hub have risen in price from $ 97 per ton to $97.8. This is partly due to the fact that coal buyers in Europe also have to buy CO2 emission quotas, and they jumped to $ 90 per ton.