Showing posts from October 17, 2021

Crude oil price to go up due European Gas Crisis: Moldova declares energy emergency!

  Moldova, the former Soviet Republic sandwiched between Ukraine and Romania, declared a state of energy emergency in the afternoon on Friday, increasing the pressure on natural gas markets and of course, oil markets too as an inevitable consequence in the end. Russian energy giant, Gazprom, had been supplying natural gas for Moldova up until the contract expired in September. Although Russia renewed the contract up until the end of October, Gazprom increased the price of gas by more than 14% per a cubic meter of gas. The grim situation in Moldova shows how Europe has become at the mercy of Russian energy might, especially when the continent moves into the winter – in the absence of a substitute. The emergency is going to last until November 20, by which the country needs to find funds to purchase gas for its population of 2.6 million people; it needs over 2.8 billion cubic meters of gas every year, with the bulk being used for harsh, colder months. As there is no end in sight

European gas crisis seems to be on the wane

  There are good signs that the European gas crisis that reached an alarming level during the past few weeks is finally easing, as the very natural factors that triggered it off, appears to be in the reverse mode. As far as the United Kingdom is concerned, as of Tuesday, the share of renewables to the power grid has gone up from 27.8% last week to 42.1% this week. In proportion, the contribution from fossil fuels has gone down from 37.6% to 26.8% during the same period. The power companies in the UK were forced to use gas and even coal, when the wind turbines could not produce estimated power for the national grid in the summer months due to slow winds. As an inevitable consequence, the demand for gas shot up, defying initial estimates and so did the price of gas. Since the sudden demand for gas led to a supply crunch, power companies turned to crude oil – as the last resort. During the short, but turbulent period, a few gas companies in the UK went bust, with a looming winter

China's Economic Woes in the Q3: how will it affect the global energy markets?

  China admitted on Monday that its economic growth slowed down in the third quarter, Q3 and cited the main causes behind it. The power outages come at the top of the list, followed by the supply bottlenecks, woes in its vast property sector and of course, the random outbreaks of the Delta variant of the Coronavirus. The GDP in the Q2, from April to June, according to the official figures, was 7.9%. It came down to 4.9% during the Q3, July-September period; the expectation was a GDP of 5.2%. The rate of growth has come down from 1.2% in the Q2 to 0.2% in the Q3 that worries the investors as never before. China, however, did not acknowledge the potential impact on its economy by the simmering political tension with its South-Asian neighbours, India and the West. Analysts had been concerned about the way the world’s second largest economy was going to handle political issues with the countries in question. Although this factor was not part of the list that China said, was beh

The Great Energy Jigsaw: rising commodity price, rig count and US crude inventories

  The oil price is on the rise and so is the US rig count – and US crude inventories - yet there are no signs of oil price reaching equilibrium, safeguarding the interests of both the consumers and producers. The rising oil price is affecting the consumers and economists warn about an inflationary storm, engulfing the entire world that has the potential to derail the global recovery. The producers, meanwhile, are worried that the rise in price at this rate is not sustainable. The concerns of the producers stem from a reasonable worry: although most major economies are limping back to normal, rather the new normal, the crude inventories do not reflect an increased consumption by consumers as a whole; on the contrary, it was the exact opposite, clearly indicated by the recent API and EIA data. In short, it looks like a self-induced-customer-restraint. In these circumstances, the oil producers do not want to go through what happened during the period of 2014 – 2016. As of Friday t

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