Analysts Warn EU Underground Gas Storage at Critical Levels After Gazprom Accident

LOCAL NEWS

• Analyst warns European underground gas storage facilities are critically low (~18%) while all storage facilities are at 61.5% following Gazrpom's Novy Urengoy plant accident.
  • Says a severe shortage could arise if Europe experiences a cold winter as Gazprom does not have the transport capacity to service above-average demand from these low levels.
  • The commissioning for the first string of Nord Stream 2 may become crucial in meeting demand
• Export prices for Russian thermal coal have nearly doubled since May, reaching $137/ton as Indonesia cuts of exports due to quarantines and South Africa from unrest related backlogs.
  • The domestic price of coal in Russia is also growing, but the coal industry, unlike metallurgists, is likely to avoid increasing the tax burden.
  • However, this is causing electricity tariffs to rise domestically in the Far East. State Energy Council says it is speaking with Rushydro to address the issue of rising tariffs

Data/Events

• 1700 PPI m/m exp at 2.0% vs 2.9% prior & y/y exp at 27.8% vs 31.1% prior
• 1700 CPI Weekly YTD, prior 4.5% & w/w prior at 0.0%
• 1100BST Russia auctions July 2031 & May 2041 Fixed-coupon OFZs