re: While Putin doubles down in Ukraine, his gas gambit is failing

EU natural gas prices continue to collapse down below $100 down from $340 in late August and the lowest since Russia cut supply...storage is nearly full, warmer than expected weather, and there are a bunch of LNG tankers floating around offshore.

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Natural gas in Europe dropped below €100 per megawatt-hour for the first time since June as unusually warm weather and ample supplies ease fears of shortages this winter.

Benchmark futures finished 13% lower on Monday, and have slumped more than 70% from the peaks of August. High temperatures are expected to remain into next month, delaying the heating season and allowing storage sites to continue to be filled. The fuller-than-usual reserves would provide the buffer needed for when the weather inevitably turns cold.

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LINK

American LNG baby!

Still wouldn't call it a buyer's market but the situation is improving for now.

But it is still early fall. In a normal winter scenario, gas demand would exceed supply + storage, and sufficiently re-filling after winter would be challenged.

For now its warm but its so early. And lower spot prices may induce the restart of industrial activity, potentially undoing some conservation gains before winter even starts. This is a dynamic situation worth watching closely.

The UKs energy cap basically doubled this month and is due to double when it's reviewed in April


It feels like anything but a buyers market to bill payers

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Situation is definitely fluid, but this current news is good news for Europe and in the long run bad news for Russia as they will never fully recover their market share.

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They will sell to China. Chinese onshore crude inventories have largely worked off all excess storage accumulated in 2020.

Over the last 12 months, their floating storage is also down from 50MM barrels to 13MM barrels thus setting up China for a major increase in crude buying and importing in 2023!

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They will sell to China. Chinese onshore crude inventories have largely worked off all excess storage accumulated in 2020.

Over the last 12 months, their floating storage is also down from 50MM barrels to 13MM barrels thus setting up China for a major increase in crude buying and importing in 2023!

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China's demand is decreasing b/c they're about to face a major recession. Plus, once that happens, the US will likely flex secondary sanctions and thwart China from purchasing Russian petro.

Turkey is selling Russia gas to Europe too