Oil and gas fall after rising due to the attack on Ukraine

The market price of futures contracts for both the Petroleum as of natural gas have evolved this Friday to the downsideafter on Thursday shots were fired after the start of the Russian invasion of Ukraine. This conflict also had an effect on the international bagsand the European markets closed with falls of more than 4% due to the seriousness of the geopolitical situation.

The brent barrelof reference for Europe, has been located in the $99.86 this Friday, compared to 105.57 where it came to be on Thursday morning. On its side, the West Texas Intermediate barrel, used as a reference in the United States, has fallen to 92.85 dollars, after having reached 100.34 dollars on Thursday.

futures of natural gaswhich are traded on the Dutch platform TTF and are a reference for the whole of Europe, have fallen more than 20% after the upward spiral of recent days.

Specifically, the price in the TTF platform It has fallen to 106.7 euros per megawatt hour (MWh), compared to 140 euros where it reached on Thursday. Although the current level of listing is high by historical standards, it is still far from the 180 euros per MWh that it reached in December.

European sanctions to harm the Russian economy

After the military operation launched by the Russian president, Vladimir Putinon Ukraine last Thursday, the heads of state and government of the European Union have approved a first round of sanctions what includes restrictions on banking, finance, exports, transport and visas.

See also  'No fault' evictions rise 63% as renters hit by cost of living crisis

These “massive” measures, according to numerous European representatives, are intended to inflict damage on the Russian economy and directly affect the financial sectorthe Energythe aviation industrythe technology or the visas.

The main goal cut “Russia’s access to markets and 70% of the banking sector“, has assured the president of the European Commission, Ursula Von der Leyen. They will also attack their energy sector and it will “make it impossible for Russia to improve its oil refineries”, the European president has assured.

Another of its objectives is to limit the Russian banking system, their access to military technology and expand the list of personalities in the country affected by the sanctions.

In this line, still direct measures against Vladimir Putin are not contemplated either remove Russia from the SWIFT financial communication system or attack the energy supply. The Union has reserved this type of measure in case the situation worsens in the future and, although sending troops to Ukraine has been ruled outyes you have made sure to send humanitarian aid.

Other countries like United States, New Zealand or Canada they have also announced various sanctions against Russia.

Russia, Europe’s largest gas exporter

The raw material it has fallen since the beginning of the negotiation to 102 euros, but has rebounded with the first news confirming that Russian soldiers have already entered Kiev, the Ukrainian capital.

Russia is the largest exporter of natural gas in Europe and with the start of the Russian military attack on Ukraine its price shot up 30% and closed at 114.5 euros per MWh, although during the session it exceeded 143 euros.

See also  Linwood man threatened to stab people and break a man's neck over owed money

In a report released this Friday, the Swiss bank Julius Baer explains that since 2020, natural gas flows through Belarus and Ukraine have slowed “to almost a trickle at times”while those crossing the Baltic Sea increased, now accounting for up to 80% of the total.

“The main concerns are not the damage to the territories now devastated by the war, but the possibility of sanctions or tariffs” that could affect the gas market, he told EFE.

The first packages of economic measures against Russia for now do not include any measure affecting energy markets (only restrictions on technological products for refineries).

Likewise, Julius Baer has also recalled the seasonal component which has the demand for gas, which is higher in winter due to its use for heating, which leaves Europe “some margin to replenish stocks until the fall”.

In addition to the impact on the industry and on households using for heating and other utilitiesthe increase in natural gas prices is the cause of the rise in electricity in wholesale markets throughout Europe.


Related Posts

George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

Leave a Reply

Your email address will not be published.