Russian Supply Concerns Will Push Gas to Record High

Concerns about gas supplies from Russia led to the fact that on Friday its price in Europe soared to a new historical high, while oil and metal prices rose sharply. Fears of disruptions to Russian exports, which provide 40% of Europe’s gas imports, have pushed the European market benchmark, the Dutch TTF, to a new record of 213,895 euros per megawatt hour (MWh).

The price of British gas for delivery next month also hit a new all-time high of 508.80 pence a therm (a unit of heat). The Russian invasion of Ukraine continues: the conflict now engulfs the entire country, and Europe’s largest nuclear power plant has been bombed. Two sessions of negotiations, on the Ukrainian-Belarusian border, and then on the Polish-Belarusian border, did not lead to a cessation of hostilities, although the parties agreed to introduce “humanitarian corridorsto evacuate civilians.

In our view, the market now takes it for granted that the very important gas pipeline through Ukraine will be damaged by the fighting.“Judge Ole Hvalbi, SEB analyst. So far, economic sanctions from the West have shied away from the Russian energy sector, but buyers have turned their backs on this source of oil, fearing further tightening of the screws.

Around 15:20 GMT (16:20 in Paris), the price of a barrel of North Sea Brent oil for May delivery rose 4.68% to $115.63, approaching its highest since 2012, hitting $119 the day before. .84 dollars. . In New York, a barrel of West Texas Intermediate (WTI) for April delivery rose 5.45% to $113.54, rising to a high since 2008 at $116.57 on Thursday.

No Iranian respite

Thus, black gold prices experienced only a short lull on Thursday evening and early in the session on Friday. Hope pulled the price of oil off its highs on Thursday.”with news pointing to an imminent Iranian nuclear deal that will add barrels to the market“, notes Neil Wilson, an analyst at Markets.com.

European diplomats who are negotiating in Vienna on the Iranian nuclear dossier will return to their capitals for consultations, the head of the British delegation said on Friday, believing an agreement was within reach. For the oil market, the deal would mean the lifting of US sanctions, allowing Iranian exports to partially offset Russian oil.

Analysts are concerned about the implications of this surge in materials and energy for households and businesses, while inflation was already galloping before the Russian offensive in Ukraine due to the effects of the Covid-19 19 pandemic and the global logistics crisis.

We are reaching a point where the industries that consume the most electricity will begin to reduce their demand.“ceasing to operate”which will lead to slower growth even if inflation rises“, worries Ole Hansen, an analyst at Saxo Bank.

In addition to gas, on the London Metal Exchange (LME), aluminum hit a new all-time high of $3,859.50 and nickel climbed to its highest level since 2008 at $30,295 a tonne. Russia is a major producer of both metals.

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