Prices Rise On Geopolitical Tensions, Sanctions On Venezuelan Gas Lifted

European gas prices rose 2.25% on Wednesday to EUR 50. They rose to a high of EUR 51.75 as prices increased strongly early in European trade after news that US President Biden’s visit to Jordan was cancelled following an explosion at a Gaza hospital. Biden still visited Israel and stood behind Israeli claims that the hospital had been hit by an Islamic Jihad rocket. The conflict also seems to be escalating with Hezbollah in the north. Gas prices are 30.8% higher since the Hamas attack on Israel.

• North Asian prices continued to rise with prices up after China’s National Energy Administration told state-owned gas companies to fill their storage tanks due to the upcoming winter and increased global uncertainties. Prices rose 3.7% on Wednesday to be up 26.3% this week.
• Israel’s Tamar gas field was shut down last week and there are concerns that the conflict may impact other facilities. The proximity of the Suez Canal is also a worry.
• The US has suspended some sanctions on Venezuelan oil but also on gas and gold and Treasury has issued 6-month licenses. They will only be renewed if the country meets its election commitments and releases political prisoners. This adds to the positive supply news that industrial action at Chevron’s Western Australian facilities had been averted.