In this week's Market Movers Europe with Hassan Butt, Associate Editor for EMEA Gas, looking closely at European gas markets:
- OPEC+ meets September 5 to decide October production policy
- EU Energy Ministers to discuss power market intervention
- Nord Stream gas flows indefinitely suspended
- Norwegian gas producers enter heavy maintenance period
This week, growing momentum around a potential cut in crude output has seen prices drop below $100/b, with debate centering on market balances and weakening demand.
Saudi Arabia's energy minister Prince Abdulaziz bin Salman said Aug. 22 that OPEC+ could cut output levels if needed, in response to what he described as a disconnect between physical and futures oil prices.
Several OPEC+ producers had backed the suggestion of output cuts, but price data shows that prices have since converged.
Europe's energy ministers will gather again on Friday to discuss the latest proposals for an emergency intervention in electricity markets.
Prices tanked in late August after EC President Ursula von der Leyen said a plan was imminent, to be followed by more fundamental reforms.
Up for discussion will be a demand reduction target for power, and a price limit on non-gas generation, providing Member States with revenue to fund handouts.
European gas prices are expected to remain bullish as the market responds to Gazprom's move to close the Nord Stream pipeline from Russia to Germany.
The Russian gas giant announced Friday that the pipeline would remain closed after an oil leak was detected during maintenance work on the last operational turbine at the Portovaya compressor station.
Norway's offshore gas sector has now entered one of its heaviest maintenance periods of the year, with capacity set to be reduced by as much as 130 million cu m/d in the coming week.
Maintenance is set to keep a lid on Norwegian gas exports through September despite European gas prices remaining at sustained highs.
I'm Hassan Butt, thank you for kicking off your Monday with S&P Global Commodity Insights.