In this week's Market Movers Europe with Kira Savcenko:
- Attempted coup in Russia raises supply risks
- Atlantic, Pacific Basin LNG day rates to rise
- Maritime Week in Gibraltar this week
- AggregateEU to issue second gas tendering round
This week in oil, a bearish tone over central bank rate tightening and a slow Chinese recovery erode hopes of a spike in summer demand.
This is despite evidence of falling US crude inventories and OPEC+ efforts to limit output.
However, the oil market and shipping companies will carefully weigh the EU’s new 11th Sanctions Package that attempts to crack down on ship-to-ship transfers of Russian oil at sea.
Meanwhile, an attempted coup in Russia has raised risks of supply security and political instability impacting energy policy. The dispute was resolved before troops reached Moscow but risks remain of further instability in the major OPEC+ crude producer and exporter.
In LNG freight, the Atlantic and Pacific Basin day rates are expected to continue rising as tonnage quickly thins out heading into the third quarter.
Many market participants are focusing on winter forward fixing for the season’s coverage.
Sources expect rates to continue firming until the end of the year.
The Maritime Week in Gibraltar is scheduled for the week ahead. Alternative shipping fuels will be in the spotlight, as IMO2025 regulations approach and shipowners and charterers adjust to the requirement for all ships to calculate their attained Energy Efficiency Existing Ship Index.
The EU’s demand aggregation platform, AggregateEU, will issue its second tendering round for the joint purchase of gas on June 26. The matching tool attracted a total 13.4 Bcm during its first-round tender, successfully matching 10.9 Bcm of gas. Regular rolling tenders are set to take place bimonthly over the next 12 months.
In European power, energy crisis emergency measures like the windfall tax on inframarginal generators will end June 30 in some markets such as Germany.
Despite the rally in June, power prices are set to enter the third quarter at a much lower level than a year ago, reducing the risk of spikes seen last summer.
I’m Kira Savcenko, thank you for kicking off your Monday with S&P Global Commodity Insights.