(LONDON) European natural gas prices climbed on Tuesday after damage to Nordstream gas pipelines, and oil prices recovered ahead of the entry into force of the European embargo on Russian crude, and in the face of fears of a turn screws of OPEC+.
Posted at 8:37
Around 7:30 a.m., the Dutch TTF futures contract, the benchmark for natural gas in Europe, was trending higher, jumping around 10% to 191,390 euros per megawatt hour (MWh).
They jumped in reaction to the announcement by the Danish and Swedish authorities that the Nordstream gas pipelines linking Russia to Germany were both suddenly hit by unexplained leaks in the Baltic Sea.
It is “difficult to imagine” that the three concomitant leaks on the two Nord Stream 1 and 2 underwater gas pipelines in the Baltic Sea are “accidental”, the Danish Prime Minister said on Tuesday, saying she did not “exclude” sabotage.
None of the pipelines are currently in service, with Germany suspending certification of Nord Stream 2 after the Russian invasion of Ukraine in February, and Russia having stopped supplying gas via Nord Stream 1 since the end of the month. of August.
“Nevertheless, this adds to concerns about Europe’s future gas supplies,” Commerzbank analysts warn.
At the same time, European nations are continuing their efforts to free themselves from Russian gas. On Tuesday, Poland, Norway and Denmark inaugurated a strategic gas pipeline that will eventually allow Warsaw to become completely independent of supplies from Moscow.
On the oil side, prices were on the rise again. A barrel of Brent North Sea crude for November delivery rose 1.52% to $85.34.
The barrel of American West Texas Intermediate (WTI) for delivery the same month, took 1.47% to 77.84 dollars.
The approach of the entry into force of the embargo of the European Union on imports of Russian oil on December 5 supports prices, bringing fears of a lack of supply to the fore.
A scenario is also gaining ground among analysts: that of a further reduction in the total production target of the members of OPEC+ (the Organization of the Petroleum Exporting Countries and their allies, led by Russia) during their October 5 meeting.
At the beginning of September, the alliance had chosen to lower its quotas by 100,000 barrels per day for the month of October.
“OPEC’s message ‘at the beginning of the month was very clear,’ said Craig Erlam, an analyst at Oanda. “She is ready to adjust the offer […] if volatility continues and prices no longer reflect “market fundamentals,” she said.
Since the group’s last meeting, the two global crude benchmarks have fallen around 10%, returning to their January levels, well off the highs recorded in March, at $139.13 for Brent and $130.50 for Brent. WTI, at the beginning of the war in Ukraine.