This week, the movement of natural gas prices in Europe was influenced by developments from Norway. The country, which began reducing exports in August due to preventive maintenance, continues to impact the market. Despite Europe’s storage facilities being over 90% full, concerns about potential disruptions in Russian gas transit through Ukraine remain, prompting traders to react to these risks.
Oil Market Update
Over the past week, the price of North Sea Brent crude oil fluctuated significantly. Initially, prices climbed from $78.50 per barrel to over $80. However, by Friday, they had fallen back to $76.90. The initial rise was driven by news of production and export halts in Libya. Yet, worries about lower demand compared to supply eventually took precedence. Speculation surrounding OPEC+ also contributed to the decline.
Libya’s production capacity was cut by half on Thursday, reducing output by 700,000 barrels per day. Overall, losses are estimated between 900,000 and 1 million barrels per day. This shutdown was caused by renewed conflict between rival governments over the position of the Central Bank head. Additionally, Iraq’s oil supplies will decrease due to exceeding OPEC+ quotas, according to Reuters.
Despite these issues, OPEC+ is expected to maintain its plans. The organization intends to increase oil production starting in October, gradually raising quotas for its members.
Gas Market Update
European gas prices saw an increase this week. At the Dutch TTF hub, the price for month-ahead gas supplies rose from $420 to $451 per thousand cubic meters. This increase is slightly lower than the spike seen after the seizure of the Sudzha gas measurement station in the Kursk region.
This time, the primary driver of the price rise was not the ongoing LNG flow to Asia or the potential halt of Russian gas transit through Ukraine. Instead, the focus shifted to maintenance work in Norway, which has become Europe’s largest gas supplier in recent years. According to operator Gassco, gas exports from Norway have dropped from over 320 million cubic meters per day to 236 million cubic meters per day as of August 30.