European natural gas prices have jumped nearly 45% this year, driven by cold weather forecasts and U.S. sanctions on Gazprombank, a key Russian financial entity. Northwest Europe is experiencing its first notably cold winter since 2021, with temperatures below the 30-year average, causing gas inventories to drop to 87.7% of capacity.
LNG (liquefied natural gas) supply remains tight. While the U.S. Plaquemines LNG project is adding capacity, global production issues like an unplanned outage at Australia’s Pluto LNG facility have disrupted supply. This pushed front-month TTF natural gas prices to €48.3 per MWh, their highest in a year.
Key Market Developments:
- ONEOK’s Expansion: U.S. pipeline company ONEOK is acquiring all public shares of EnLink Midstream in a $4.3 billion deal, strengthening its 50,000-mile pipeline network.
- EQT and Blackstone JV: EQT, a leading U.S. natural gas producer, is partnering with Blackstone, which is investing $3.5 billion in the Mountain Valley Pipeline project.
Geopolitics and Oil:
With December 1 approaching, attention turns to OPEC+. Saudi Arabia, Russia, and Iraq met in Baghdad to discuss oil market stability. OPEC+ is considering delaying planned production increases due to weak global demand. The group’s upcoming meeting will now be held online.
Regional Updates:
- China’s Import Boost: China issued additional crude oil import quotas to independent refiners, allowing them to ramp up production before year-end.
- Pemex’s Financial Struggles: Mexican state-owned Pemex faces pressure to clear $5.1 billion in overdue debts, even as the government simplifies its tax structure.
- Venezuela’s Propane Crisis: An explosion at Venezuela’s Muscar gas complex has reduced propane production by 97%, leading to severe cooking gas shortages for months.
Market Dynamics:
- Diesel Shortages: Diesel markets are tightening, with prices rising due to lower supplies from Saudi Arabia, the U.S., and Europe.
- Bangladesh’s Energy Expansion: Bangladesh will open bids for offshore gas exploration and liberalize its LNG market to attract more imports.
- Russian Gas Steady: Despite disputes between Gazprom and OMV, Russian gas flows to Austria remain stable.
Corporate News:
- TotalEnergies Cuts Ties with Adani: French energy company TotalEnergies ended its financial collaboration with India’s Adani Group over bribery allegations.
- ExxonMobil Leaves Suriname: ExxonMobil exited Block 52 in Suriname, handing full control to Malaysia’s Petronas.
Additional Highlights:
- Turkey Seeks Waivers: Turkey is negotiating with the U.S. for a waiver to continue paying Gazprombank for natural gas supplies, which account for 50% of its imports.
- Petrobras’ Dividend: Brazil’s Petrobras approved a $3.4 billion extraordinary dividend payout, signaling financial improvement under new leadership.
These updates reflect the ongoing challenges and shifts in global energy markets, shaped by geopolitical tensions, corporate decisions, and supply-demand dynamics.
