Energy market in a week: Russian ban spoils diesel prices in Europe

Ban on the export of gasoline and diesel from Russia has led to the highest recent rise in oil prices. Diesel fuel quotes in Europe also went up. The Ukrainian Armed Forces' attacks on Russian refineries and unscheduled plant repairs are beginning to be felt all over the world.

Oil

During the week, oil prices rose by more than 5%. The cost of the benchmark North Sea Brent rose from $ 66.7 to $ 70.3 per barrel.

"The geopolitical risk premium, which has been steadily growing over the past two months amid increased attacks by Ukrainian drones, has now materialized into a real shortage of supplies, which in many ways negatively affects Europe, which is experiencing a structural shortage of distillates," PVM analyst Tamas Varga told Reuters.

On the eve of Deputy Prime Minister Alexander Novak confirmed that a complete ban on gasoline exports will be extended until the end of the year. And for diesel fuel, it will be valid until October, until the end of the year, restrictions will apply only to non-producers.

Russia is a major supplier of diesel fuel to the world market and, although Europe has banned its import from Starting from February 2023, stopping deliveries abroad will force countries that received Russian diesel fuel to compete with EU countries.

According to the Frankfurt Stock Exchange, the price of diesel fuel has already risen to $ 730 per ton — the highest level since mid-July, when summer demand was high.

Meanwhile, even plans to resume oil supplies from Iraqi Kurdistan on September 27 did not affect the price of oil.

Gas

Gas in Europe continues to trade around $ 400. Deliveries for a month in advance from the TTF exchange increased in price over the week from $ 396 to $ 400 per thousand cubic meters.

The situation on the gas market continues to remain stable. Countries The EU is approaching the planned 83% of storage capacity. And although the injection has decreased in recent days, LNG supplies continue to remain at a high level.

In addition, Norway is completing preventive repairs, exports are slowly recovering, while the country's companies plan to launch abroad even those volumes that were used to increase oil production.

In such a situation, the European Union, in order to please Donald Trump, plans to accelerate the abandonment of Russian LNG and ban it a year earlier — from 2027. Such an attempt by Brussels to encourage the US president to fulfill his promise of "crushing" sanctions against Russia does not please traders at all.

If gas costs $ 400 now, then they insure it for next summer, when the injection season is underway, from a price of $ 614. Traders fear that the actions The EU and the cold winter will lead to the fact that next summer gas in Europe will rise in price by 60%.

Coal, meanwhile, began to bargain in its own way. Monthly deliveries from the Antwerp-Rotterdam-Amsterdam hub (ARA) dropped from $94.5 per ton to $92.9. On the one hand, coal is a competitor to gas in electricity generation. On the other hand, there are a lot of restrictions on it, including quotas for CO2 emissions, which limits the use of coal.