Standard Chartered: European stocks short-circuit Putin’s energy weapon

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Europe’s natural gas stockpile build is about nine weeks ahead of the same period last year, limiting the pressure Russian President Vladimir Putin can exert on his country’s exports.

“EU natural gas stocks are still growing relatively strongly, despite the fact that Russia has reduced flows through the Nord Stream pipeline to just 20% of its capacity,” Standard Chartered analysts said in a note yesterday, citing the Bloomberg.

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“It was once thought unthinkable that Europe could get through a winter without Russian gas, but with the momentum shown in filling stocks we now believe it can,” analysts at Standard Chartered said.

And as they characteristically note, “The power of the Russian physical “weapon” has decreased significantly”.

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The period of natural gas injections in Europe is expected to end with about 103 billion cubic meters in storage, which “will provide sufficient autonomy even if there is no more Russian gas.”

Since the beginning of July, European inventories have been building faster than the five-year average rate, while in the previous two months the filling rarely fell below this level.

Higher liquefied natural gas (LNG) imports also helped bolster stocks, despite a 70% drop in total Russian flows to the European Union.

At the same time, the earlier-than-expected reopening of the LNG plant in Freeport, Texas, will be an important alternative if flows through Nord Stream are completely disrupted.

Source: Capital

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