In this week's Market Movers Europe with Maxim Grama, Team Leader for European Power, looking closely at electricity markets in Europe:
- Recession fears dampening oil prices
- Supply security concerns dominate gas
- EU ministers to discuss power market interventions
- LNG shipping rates surge ahead of winter
- Container rates in freefall
This week, in oil, recession fears and increased oil stock levels are dampening prices.
But rising geopolitical tension following Russia's ‘partial mobilization' for the war is lending some support.
Looming on the horizon is the EU's Russian oil embargo, with a ban on seaborne imports approaching.
European governments are meanwhile trying to boost resilience, with the UK set to relaunch North Sea licensing in the next couple of weeks after a pause.
As the official start of winter for the European gas market nears, concerns remain over security of supply, with Russian flows reduced to a trickle.
EU gas stocks are now more than 86% full, but a cold start to winter could see Europe begin to draw down stocks early.
On Friday, European energy ministers meet once again to discuss the Commission's proposed interventions in the power market.
On the table are a revenue cap for non-gas power generators, a mandatory 5% cut in peak demand, and a windfall tax on oil and gas companies.
Shipping rates for LNG carriers are surging on fears of lack of available tankers for the winter, with daily hire rates spiking both for tri-fuel tankers and two-stroke engine ships.
Container rates, on the other hand, are sliding ahead of China's Golden Week at the start of October, at a time when normally they would be rising as consumers fill their inventories.
However, this year inflationary pressure and high energy prices are impacting European consumers, with supply far outstripping demand.
I'm Maxim Grama, thank you for kicking off your Monday with S&P Global Commodity Insights