A Rystad Vitality fuel and LNG market replace from Rystad Analyst Christoph Halser, which was despatched to Rigzone by the Rystad staff late Thursday, highlighted that European fuel costs had risen to their highest degree this 12 months “as harm to the only real entry level of the Ukraine fuel transit was revealed”.
“Gasoline markets have been alerted to wreck on the Sudzha fuel metering station on 12 August, with satellite tv for pc photographs suggesting harm to not less than one of many station’s 4 compressor models,” the replace famous.
“This despatched European fuel costs to their highest degree since 1 December 2023, earlier than Gazprom denied the station’s destruction late Monday afternoon,” it added.
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“Month-to-month futures on the Title Switch Facility (TTF) peaked at $13.65 per million British thermal models (MMBtu) throughout Monday’s buying and selling, up 5.5 % from Friday’s closing value,” it identified.
The replace additionally acknowledged that the deliberate but simultaneous upkeep of the upstream part of the Trans Adriatic Pipeline might have additional contributed to the swift value motion.
Bodily stream by way of Sudzha on Monday recovered to 42.98 million cubic meters per day (MMcmpd), the replace famous, highlighting that this was up 12.9 % from Friday’s low of 39.77 MMcmpd.
“Hypothesis on halted flows moderately than precise provide nominations continues shaping European fuel value growth for the week,” the replace mentioned.
“Month-ahead futures closed at $13.04 per MMBtu on Monday, up simply 0.9 % from Friday. Week on week, as of Wednesday, TTF fuel futures costs elevated by 1.8 % to $12.63 per MMBtu,” it added.
Henry Hub Rebound
The Rystad replace highlighted that North American Henry Hub costs rebounded this week, “reaching $2.148 per MMBtu on 14 August, pushed by rising anticipated cooling demand by the top of the month”.
Above-average temperatures are forecast for all U.S. areas on the finish of the month, the replace famous.
“Within the South Central and the Mountain area, temperatures are anticipated to rise above the 1979-2000 common by mid-month,” it mentioned.
“In the meantime, the Pacific and the Midwest are forecast to expertise increased temperatures on the finish of the month. U.S. regulatory company, the Nationwide Oceanic and Atmospheric Administration (NOAA) anticipates temperatures of greater than 82 levels Fahrenheit throughout the Pacific area on 29 August, in comparison with a long-term common of 66.2 levels,” it added.
“Equally, the Midwest will climb to 84 levels Fahrenheit, above the long-term common of 70.6 levels, whereas the South Central will see temperatures of 94.3 levels Fahrenheit on 29 August,” it continued.
These forecasted excessive temperatures are anticipated to result in elevated cooling demand, inserting upward strain on pure fuel demand by means of gas-fired electrical energy technology, the replace acknowledged.
The replace additionally outlined that an above common hurricane season “may enhance the chance of liquefaction plant outages and result in decrease feedgas provide, appearing bearish on Henry Hub costs by means of extra provide”.
provide, Rystad’s replace famous that “the rig rely fell by three to 98 rigs for the week ending 30 July”.
“U.S. dry fuel manufacturing within the Decrease 48 fell 0.3 % over final week to a each day common of 103.2 billion cubic toes per day,” it added.
“In the meantime, 21 billion cubic toes of fuel was added to underground storage over the earlier week, bringing whole inventories to three.27 trillion cubic toes,” it continued.
“Whereas 14.8 % above the five-year common and eight.2 % over final 12 months’s values, the velocity of storage additions has barely declined in latest weeks,” it went on to state.
Fears of Provide Disruptions
A earlier Rystad fuel and LNG market replace from Halser, which was despatched to Rigzone on August 9, famous that “recession fears struck monetary markets” however added that fuel markets “priced in fears of provide disruptions within the Center East within the wake of a retaliation risk from Lebanon-based militant group Hezbollah and Iran following the assassination of Hamas chief Ismail Haniyeh in Tehran”.
“Along with a possible decline in Israeli fuel manufacturing from the Tamar subject and halted flows by way of the Jap Mediterranean Gasoline (EMG) subsea pipeline to Egypt, Ukrainian forces on 7 August confirmed the seizure of the Sudzha fuel metering station in Russia,” that replace highlighted, stating that the fuel station is “notably the entry level for Russian pure fuel into the EU”.
“World fuel markets throughout the board noticed an uptick in costs in response to the potential threats to provide,” the replace mentioned.
To contact the writer, e mail andreas.exarheas@rigzone.com
