Gas prices are set to record a second straight weekly gain amid ongoing concerns about Russian supply disruptions.
Dutch front-month futures, the benchmark for European wholesale gas prices, remain close to a one-year high following a dispute between a Kremlin-controlled energy giant and one of its clients, which sent prices soaring.
The contract has risen over 7% this week, building on last week’s increase of more than 8%, as traders monitor gas flows from Russia across Europe.
Austrian energy company OMV was awarded €230 million (£190 million) by an arbitration panel in its dispute with Kremlin-backed Gazprom. However, due to sanctions on Gazprom, OMV’s chances of recovering the full amount are slim, leading the company to consider offsetting the sum against ongoing gas payments to the Russian supplier.
Warren Patterson, head of commodities strategy at ING, commented: “Payments are typically due by the 20th of each month, so the market is likely to remain tense until then. Forecasts of colder weather next week are also adding upward pressure to prices.”
Dutch front-month futures were last down 1.2% at around €45 per megawatt hour.
Oil prices decline on weak demand from China.
Brent crude, the global benchmark, fell 0.4%, trading near $72 per barrel, and is set for a weekly drop of more than 2%.
In China, oil demand decreased in October compared to the same period last year, with refineries processing 4.6% less crude, marking the seventh consecutive month of year-on-year decline. The slowdown follows plant closures and reduced operations at smaller, independent refiners, according to data from the National Bureau of Statistics.
Oil prices have faced additional pressure since Donald Trump’s US presidential election victory, which has boosted the value of the dollar. A stronger dollar makes commodities priced in the US currency more expensive for international buyers.
