Energy market for the week: OPEC+ has set its sights on a share, Europe will get only expensive gas

OPEC+ is changing its strategy and, instead of maintaining high prices, is going to take part of the market share from its competitors, increasing production and lowering quotations. The situation is different in the European gas market. Countries The EU will have to put up with high prices if they want to fill their vaults and create sufficient stocks by winter.

Oil

World oil prices have lost a little over the week. The cost of the benchmark North Sea Brent dropped from $ 65.6 per barrel to $ 64.8. The reason is the news from OPEC+. World prices could have gone lower, but they were not given other geopolitical news.

OPEC+ is discussing accelerated production growth in July — also with a three-month increment, 411 thousand barrels per day. These rumors from the participants of the transaction stirred up the market.

"OPEC+ speculation is the biggest factor today," John Kilduff, partner at Again Capital, told Reuters. "A possible OPEC+ decision will be quite weighty."

"We are seeing how the market is reacting to evidence that OPEC is abandoning its price protection strategy in favor of market share," said Harry Chiligiryan of Onyx Capital Group.

In his opinion, the plans of OPEC + can be compared to removing a Band-Aid: "You do it in one fell swoop."

Helima Croft, an analyst at RBC Capital, said the key question will be whether voluntary cuts will disappear even before the leaves turn yellow.

However, oil prices have not fallen as low as one might expect. Two other news items played against their decline. Negotiations between the United States and Iran's negotiations on a new nuclear deal are not going as we would like and may end in nothing. In addition, Donald Trump announced plans to introduce 50 percent duties on goods from the EU.

Gas

As last year, gas prices in Europe are starting to rise by the summer due to fears of a shortage of volumes to replenish storage facilities. During the week, quotes on the TTF exchange for the month ahead immediately increased by $ 30 per thousand cubic meters — up to $ 436. This is the first significant jump in many weeks.

Goldman Sachs Group said that Europe can provide enough LNG to replenish storage facilities for next winter, but the region will face competition from Asia if prices fall.

"We believe that prices should remain at the current level or slightly higher in order to kill the demand for LNG outside Europe," Samantha Dart, co—head of global commodities research at the investment bank, told Bloomberg. —If LNG becomes too cheap this summer, you will see other consumers start buying it."

Coal quotes have risen this week, but not as much as gas. Monthly deliveries from the Antwerp-Rotterdam-Amsterdam (ARA) hub rose from $94.2 to $96.1 per tonne in a week.