Winter gas shock coming for UK consumers?

TL;DR

The oil market has adjusted to the conflict in Ukraine, but the gas market in Europe has been greatly affected.

Transcript

hello with me today I have Ashley Kelty director an oil and gas research analyst at Pammy or Gordon hi Ashley Hi how are you very well look Ukraine has obviously had a significant impact on oil over the past uh past 12 15 months um so but what would happen if there was a resolution to the conflict tomorrow or or has the world just adjusted and move... Read More

Key Insights

• 🫢 Oil market has adjusted to the conflict, but gas market in Europe has been greatly impacted.
• 🫢 Sanctions have limited impact on oil supply, but the real impact of a resolution to the conflict would be felt in the gas markets.
• 🫢 Europe needs to replace 60 billion cubic meters of Russian gas, leading to potential price increases.
• 🫢 Gas prices are unlikely to drop below current levels, and the upcoming winter will be challenging for gas supply.
• 😘 Lower prices may lead to increased demand from industrial facilities, further straining supply.
• 🌍 LNG supply will be reduced as China reopens, resulting in competition between Europe and Asia.
• 😮 Prices are likely to rise as Europe competes for LNG supply.

Questions & Answers

Q: How has the oil market adjusted to the conflict in Ukraine?

The oil market has adapted and moved on, with sanctions having limited impact on oil supply. Russia has still been able to sell crude at similar levels to pre-Ukraine.

Q: What has been the impact of the conflict on the gas markets?

The gas markets, especially in Europe, have been greatly impacted. Europe needs to replace 60 billion cubic meters of gas received from Russia last year, which could lead to price increases.

Q: Will gas prices drop below current levels?

No, there is no scope for gas prices to drop below current levels due to the impact of the conflict and the need for Europe to replace Russian gas.

Q: What challenges will Europe face in the upcoming winter regarding gas supply?

Europe will need to refill gas storage facilities, but there won't be sufficient LNG supply as it will be displaced to Asia once China reopens. This, along with the replacement of Russian gas, will push gas prices up.

Summary & Key Takeaways

• The oil market has adjusted to the conflict in Ukraine, with sanctions having limited impact on oil supply.

• The real impact of a resolution to the conflict would be felt in the gas markets, particularly in Europe.

• Europe will need to replace 60 billion cubic meters of gas received from Russia last year, leading to potential price increases.