The spike in UK gas prices yesterday demonstrated that the NBP remains a well-functioning hub, while Italy’s PSV struggled to deal with a halt to Tag pipeline flows following an explosion at Austria’s Baumgarten compressor station.
UK wholesale gas prices did what the market is designed to achieve, which is to ensure there are no interruptions to supply.
Ukraine’s colourful politics drew the attention of the European media again this week. But the farcical failure of special forces to detain Mikheil Saakashvili — former president of Georgia, turned governor of Odessa, turned Ukraine oppositionist — in the centre of Kiev on 4 December was just a sideshow.
European near-curve prices rallied in November despite early indications that there will be more gas left in storage at the end of the winter than in most recent years.
Cold weather in November, and forecasts for it to extend into December, supported TTF contracts for delivery over the remainder of the winter. And the firmer gas prices are especially evident when comparing gas with coal — its main competition — as the TTF day-ahead market has climbed to levels that would make even the highest efficiency plants uncompetitive.
Don’t be surprised to find an idle Spanish language interpreter or two along Vienna’s Helferstorferstrasse this week, as Latin America’s sole Opec members are preoccupied with their rocky home fronts. Venezuela and Ecuador appear content to let Opec´s heavyweights plus Russia hammer out the terms of the likely extension of a deal to restrict output. Their effective withdrawal means the region has less of a voice at the negotiating table, matching their loss of relevance in the market. Continue reading
You’re an oil refinery manager, somewhere in Europe. You can sell diesel for $570/t, or ethylene for $1,120/t. Even given higher costs for ethylene, petrochemical margins are looking a lot stronger than refining margins. So, which are you going to produce?