Energy market in a week: Europe doesn't need renamed Russian gas?

The US authorities supported oil prices, and gas quotes are declining. So far, everything is fine with blue fuel in Europe — for all $ 400 per thousand cubic meters. This is twice as high as before the energy crisis. But life is like that. Competition for LNG has not disappeared, and the risks of Ukrainian transit remain. They started talking in Azerbaijan that Europe wants Caspian gas, not the renamed Russian gas.

Oil

This week, oil-producing countries were able to breathe a little. World prices have gone up. During the week, the quotes of the benchmark North Sea Brent rose slightly — from $ 71.9 per barrel to $ 74.7.

The market revived after the US Federal Reserve cut rates by half a percent.

"The decline in US interest rates has supported risk sentiment, weakened the dollar and supported oil this week," UBS analyst Giovanni Staunovo told Reuters. "However, it will take time before the rate cut supports economic activity and the growth of oil demand."

The Fed predicts that credit money will become cheaper further — the rate will continue to decline: by another half percent by the end of the year, by a percentage next year and by another half percent in 2026.

"The Fed's decision to cut interest rates and some hangover from Hurricane Francine are the only two things that are supporting the market right now," said Tim Snyder, chief economist at Matador Economics.

Gas

Gas continues to become cheaper in Europe. Slowly. By the end of the working week, the quotes dropped by another $ 6 to $ 409 per thousand cubic meters. At this price, they offer deliveries for October at the TTF hub. The reasons are still the same. Large gas reserves have been created in Europe, and reduced demand is being offset so far by a decrease in LNG imports and preventive maintenance in Norway.

"Despite the decline in prices in mid-September, there are significant concerns about the future dynamics of supply and demand. The situation is further complicated by the growing competition for LNG, in particular from Egypt, which announced plans to purchase 20 LNG shipments starting in October, intensifying competition in the market ahead of the winter season. This new demand, along with ongoing geopolitical uncertainty, keeps the natural gas market on edge," ChemAnalyst writes.

Also, the market does not forget that by January 1, 2025, the contract for the transit of Russian gas through Ukraine will expire. However, as a senior Azerbaijani official told Reuters, the EU and Kiev is asking Baku so far only to intensify negotiations with Gazprom on one topic: Azerbaijan buys Russian gas for itself in order to free up more of its fuel for Europe. Consultants of Energy Aspects Ltd believe that Gazprom and Azerbaijan's Socar can follow the path of a financial swap, however, EU politicians and Kiev may be against simply renaming Russian gas to Caspian, they believe.

If gas becomes cheaper, then coal can only accept the fact that its quotes will also decrease. Fuel supplies from the Antwerp—Rotterdam—Amsterdam hub (ARA) for the month ahead dropped from $114 per ton to $112 in a week.