BAKU, Azerbaijan, July 22. Russian gas flows have reportedly been restored after Nord Stream maintenance was completed on July 21st giving mild relief to European gas prices after fears of a prolonged loss of supply dominated prices action over the last 10 days, Trend reports with reference to Fitch Solutions.
“Early indications are for a return to about 40 percent of pipeline capacity based on nominations for daily delivery contracts. The news of restoration has been a welcome relief as prices fell nearly 6.5 percent before paring back losses and currently trading at about 2 percent lower. UK NBP prices on the other hand rose by nearly 10 percent on the news before giving up half those gains by midday. EU storage levels of natural gas are at 65 percent of capacity with the November 1 target of 80 percent looking achievable barring further significant changes to gas flows from Russia. Extreme temperature events could raise consumption which could also impact storage builds as the summer season progresses,” the company said in its latest report.
As for oil prices, Fitch Solutions notes that Brent crude prices have rebounded above the USD100/bbl mark, averaging above USD105/bbl for the previous week however continued concerns over a slowing economy dominate sentiment.
“Last week’s higher than expected US inflation report has oil markets concerned that higher and faster interest rates rises could curb global oil consumption sharply. Growing US stocks of gasoline, usually drawn upon during the summer driving season, have indicated weaker demand for the road fuel in sign that high prices are leading to demand destruction. However, the tight supply picture for refined production, along with crude, are supporting a fundamentals led view for high prices.
Concerns that new supply will not be available in near-term are
helping to keep expectations for prices primed to the upside. The
wide spread of analyst price forecasts indicates that bearish
factors are increasingly gaining traction
as downside factors add to the uncertainty for price gains. The
divergent views for oil prices and the fundamental outlook will see
prices remain highly volatile as low liquidity supercharges any
news supporting either a bullish or
bearish view. We remain steadfast in our current forecast for Brent
crude to average USD105/bbl in 2022, falling to USD100/bbl in
2023.”
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