Energy prices: Oil rises after Russia halted gas supplies

The suspension of Russian gas supplies has raised fears of disruptions in Russian hydrocarbon supplies.

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LOil prices rose slightly on Wednesday after news that Russian gas supplies to Bulgaria and Poland had been cut, reviving fears of disruptions to Russian hydrocarbon supplies.

At around 11:35 GMT (13:35 Brussels), a barrel of North Sea Brent for delivery in June was up 0.58% at $105.60. The barrel of American West Texas Intermediate (WTI) for delivery in the same month rose 0.54% to $102.25.

Russian concern Gazprom announced on Wednesday that it had suspended all gas supplies to Bulgaria and Poland, assuring that these two European Union member countries had not made any payments in rubles. A stop “under the Yamal contract” confirmed by the Polish gas company PGNiG.

“This action has pushed oil and gas prices further higher,” said Susannah Streeter, an analyst at Hargreaves Lansdown. “This is the first time the Kremlin has cut gas supplies to a country since the invasion began,” PVM Energy’s Stephen Brennock said. But “Jamal has played no significant role in Europe’s gas supply in recent months,” said Carsten Fritsch from Commerzbank.

The analyst says that gas flows to Germany via this pipeline “have virtually stopped since late December, accounting for less than 2% of Russian gas supplies to Europe year-to-date.

This also explains the relatively dovish reaction of the European TTF natural gas price, which hit 127.50 euros per megawatt-hour (MWh) on Wednesday before falling to 106.385 around 09:25 GMT (11:25 Brussels), a long way from its historical record was removed. of EUR 345.00 per MWh was reached at the beginning of March.

“Today’s news will only spur others to accelerate their efforts to wean themselves off of Russian oil and gas imports,” Susannah Streeter continued.

Russian imports provide Europe with 40% of its natural gas needs and 30% of its oil needs. The European Union has “prepared” for this scenario of an interruption to Russian gas and is preparing “a coordinated response,” said EU Commission President Ursula von der Leyen on Wednesday.

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