At a high of more than two weeks of argon – New ‘jump’ for gas

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Oil and gas prices hit a new high on Wednesday as developments on the Russian-Ukrainian war front raised fears of possible global energy supply problems.

The rise in oil prices today was fueled by reports that the US and the EU on tomorrow, the first day of the two-day Summit of European Leaders, which will be attended by US President Joe Biden, are going to announce new sanctions against Russia and tighten the under existing sanctions in order to increase pressure on the Kremlin to end the invasion of Ukraine.

A development that intensifies fears of problems in energy supply, at a time when the Energy Intelligence Service announced a significant reduction in US oil and gasoline reserves. U.S. crude was down 2.508 million barrels, down from 3.61 million last week, and analysts at a Reuters poll expected a drop of 1.85 million barrels. During the same period, gasoline inventories fell by 2.9 million barrels, reaching 238 million barrels, while analysts expected a drop to 1.5 million barrels.

An additional boost to oil prices was provided by Russia’s warning to cut exports through the Caspian Pipeline Consortium (CPC) by up to 1 million barrels a day, or 1% of world production, due to storm damage to berths.

Oil exports through the CPC were completely shut down on Wednesday, and the pipeline could be shut down for up to two months to repair the damage, said Russian Deputy Prime Minister Alexander Novak.

West Texas Intermediate crude for May delivery jumped $ 5.66, or 5.2 percent, to close at $ 114.93 a barrel on the New York Mercantile Exchange on Wednesday. WTI writes profits over 11%.

Brent crude traded up $ 6.12, or 5.3%, and ended the day above $ 120 a barrel at $ 121.60, extending its earnings to date. per week at 13%.

This is the highest closing for both contracts since March 8, according to Dow Jones Market Data.

A new leap for gas prices as well

Gas prices in the Netherlands and Britain jumped again on Wednesday, following statements by Russian President Vladimir Putin that Russia would start selling gas in rubles to “unfriendly countries” as the European Union promotes legislation. which will establish minimum levels of stored gas reserves.

In particular, Vladimir Putin said that Russia intends to turn to the ruble in transactions for the sale of gas to “unfriendly”, adding that the government will instruct Gazprom to make corresponding changes in the contracts.

Putin called on the central bank and the government to set up a new system “within a week” that should be “clear, transparent” and regulate payments, including “the acquisition of rubles in the Russian foreign exchange market.”

The Russian president’s statement pushed the price of the British delivery council to close at 246 pence per million British thermal units the next day, up 11.8%, according to Reuters.

Respectively, in the Netherlands, the gas contract for the next month jumped by 14.1% and closed at 113 euros per megawatt hour, while the price for the second quarter recorded a “jump” by 15.3% to 113 euros per megawatt hour.

Putin added, of course, that “Russia will, of course, continue to supply gas according to the volumes and prices … set out in previous contracts,” explaining that “the changes will only affect the payment currency, which will change.” in Russian rubles ”.

According to Reuters, as of January 27, Gazprom’s gas sales in Europe and other countries are settled mainly in euros, at around 58%.

At the same time, the European Commission has proposed legislation requiring EU countries to maintain reserves of at least 80% of their capacity this year, and at least 90% by 1 November each year from 2023 onwards.

The legislation will need the approval of EU countries and the European Parliament, but traders stress that this goal is difficult to achieve even at times when demand is lower.

Source: Capital

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