EU Gas Surging on Supply and Security Risks

OIL

• Crude and products are trading higher with increased uncertainty over Russian supplies and OPEC production targets despite the ongoing demand worries.
• There are growing calls for an OPEC production cut and hurricane disruption to US production has also provided support to crude
• The US EIA inventory data due shortly is expected to report small builds in crude, gasoline and distillates as well as a fall in refinery utilisation although API data last night showed a draw in gasoline.
  • Brent NOV 22 up 0.9% at 87.03$/bbl
  • WTI NOV 22 up 1.6% at 79.72$/bbl
  • Gasoil OCT 22 up 2.5% at 991.25$/mt

GAS

• European gas has surged since reports of damage to both Nord Stream pipelines due to suspected sabotage and concerns for Russian supplies through Ukraine.
• Europe was not receiving any supplies through the Nord Stream pipelines, but the damage confirms the supplies will not return any time soon. The damage adds to the energy security risks in the area with the new Baltic pipeline due to open next week.
• Gazprom also yesterday warned of a risk it won’t be able to pay Ukraine transit fees if Russia sanctions Ukraine’s Naftogaz.
• The surging EU prices are also supporting high exports from US although near record production despite hurricane Ian have kept US prices down.
  • TTF OCT 22 up 8.5% at 202€/MWh
  • US Natgas OCT 22 down -0.8% at 6.6$/mmbtu