New rally of 3.5% for oil prices – 7% drop in gas

LAST UPDATE 18:00

Oil is expanding its upward reaction with an increase of more than 3.5% and with which it is trying to win the positive sign in a week that all indicated that it will be the first downturn in the last four.

In particular, Brent July contract is moving up 3.4% the 3.69 dollars and its price is set at $ 111.16 the barrel.

Respectively, the June contract of the American WTI rises 33.7% the 3.9 dollars and trades in $ 110.08 the barrel.

Characteristically, due to the two-day dive that brought losses of about $ 10 on Monday and Tuesday, on a weekly basis Brent was in the morning at –3% and the WTI at –2%but now the two contracts are a breath of fresh air.

The market continues to assess the possibility of imposing a European embargo on Russian oil, but as the days go by it seems to be moving away at this stage.

According to Bloomberg sources, some EU countries believe that it may be time to abandon this plan for later and move on with the rest of the new package of sanctions, if Hungary is not persuaded to support the embargo.

At the same time, expectations seem to be renewed for Iran to return to world production, with European Union Foreign Minister Josep Borrell saying that the EU nuclear coordinator’s trip to Tehran unblocked the situation after two months. impasse.

“Let’s say that the negotiations have been blocked and have been unblocked, which means that there is a prospect of reaching a final agreement,” Borel said, adding that “these things cannot be resolved overnight.”

Elsewhere, Beijing authorities have denied rumors of a lockdown in the city despite rising cases. Concerns about demand levels in China, in the context of the impact on the country’s economic activity of the extensive lockdowns in Shanghai and other cities, were the main reason for the two-day dip in prices earlier in the week.

More generally, however, persistent inflation and interest rate hikes by central banks around the world continue to plague investors.

According to Stephen Brennock of PVM Oil, “the roller coaster course shows no signs of stopping”, explaining that on the oil front and the wider range of risk assets, fears are growing about an impending global recession led by inflation.

Gas is declining

On the contrary, the de-escalation of pressures shows the prices of natural gas, which after the rally triggered by the flow disturbances from Ukraine, are now falling.

In particular, the June contract in Amsterdam (TTF) is trading at a loss 6.9% and its price at 99.3 euros the megawatt hour.

Flows from Russia to Europe via Ukraine were reduced within a week of the closure of a pipeline entry point due to the war, but EnergyScan estimates that “if they remain current, the market could consider the situation manageable.” .

It is worth noting that Barclays estimates that a possible closure of the gas tap from Moscow is expected to cost 5 percentage points of GDP in the Eurozone and lead the euro below its one-to-one level with the dollar.