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No Russian gas to flow into EU in 2023 - Fitch Ratings

Oil&Gas Materials 6 December 2022 15:59 (UTC +04:00)
No Russian gas to flow into EU in 2023 - Fitch Ratings
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, Dec.6. Fitch Ratings expects that there will be no Russian gas flowing into the EU in 2023, Trend reports citing the rating agency.

“Europe will be more reliant on LNG supplies and face competition from Asian buyers. However, warm weather, a reduction in European demand, primarily due to lower consumption by industrial users, and continuing vast LNG supplies to Europe led to spot prices declining from their peaks, despite modest increases once winter started. EU gas storage utilization levels are high at 90-95 percent at the moment, which is better than we previously anticipated and should help ease supply-demand pressures in 2023. We have therefore cut our near-term assumptions for European gas prices, although they will remain high compared to historical averages and highly volatile,” reads a report released by Fitch Ratings.

Fitch Ratings has reduced its 2022-2023 assumptions for European TTF gas prices and its 2022 US Henry Hub price, reflecting reduced gas demand in Europe primarily due to lower industrial consumption, ample LNG supplies, and a warm start to the 2022-2023 winter.

“Our reduced Henry Hub price assumption for 2022 reflects continuing robust supply growth, particularly in the Haynesville and Permian basins, where operators are adding rigs, aiming to increase their scale and capitalize on strong LNG demand. In addition, market expectations of a relatively warm winter in both Europe and the US have put pressure on gas prices.”

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