World oil prices and gas prices in Europe fall under the pressure of increased supply, despite a decrease in exports from the Russia

Contrary to Gazprom’s hopes to “freeze” its main customers, gas prices in Europe are falling sharply against the background of increased supplies of liquefied natural gas. Yesterday, November gas futures fell another 15%, falling below the level of $1,100/thousand cubic meters for the first time since the beginning of summer. And since mid-August, when Gazprom almost stopped gas supplies to the EU, gas quotations have tripled.

Off the coast of Spain, which has become the main hub for gas imports and controls 33% of the capacity for receiving and almost 50% for the storage of liquefied gas, there are currently 35 LNG tankers adrift with 2.5 million tons of LNG (liquefied natural gas). For the first time this year, its deliveries exceeded the volume of deliveries from Gazprom.

For 9 months of the current year, Gazprom reduced gas production by 30% and its export by 67%, but European storage facilities are 92% full.

In addition, the quotation is pressured by the decrease in oil prices, caused by the decision of the administration of the US president to send additional volumes of oil from the strategic reserve to the world market in response to the backroom conspiracy of the Russian Federation and the OPEC countries to reduce production by 2 million barrels/day.

Against the backdrop of OPEC’s decision on October 6, oil prices rose to $98/barrel, but over the next two weeks, December Brent crude oil futures on the London ICE Futures exchange fell by 8.9% to $90/barrel.

The President of the People’s Republic of China, Xi Jinping, at the party congress announced the continuation of the strict policy to contain the coronavirus, so the demand for oil from China may remain low in the coming months due to possible new lockdowns.

Stable oil prices will support canola and canola quotes as biodiesel demand remains strong and European consumers step up purchases.

November futures and rape in Paris in two weeks fell by 1.6% to 623 €/t, but for the month added 3.8%, and in the near future sharp price fluctuations are not expected.

In Ukraine, demand for rapeseed for delivery to Black Sea ports is recovering on the news of the possible continuation of grain corridors, and demand prices are $465-475/t or UAH 17,000-17,500/t, while demand prices for deliveries to EU countries have risen to 580 -615 €/t DAP Poland, Czech Republic, Slovakia.

Tags: gas, Ukraine, Russia, China, EU, prices, Oil