Month: March 2022

A new historical record for gas prices in Europe has been set. On Friday, March 4, prices for April futures on the TTF hub reached $2,391 per thousand cubic meters against $1,724 the previous day.

Brent oil also set a new record, rising above €115 for the first time since June 2014, to €115.7 per barrel.

Elon Musk, the head of Tesla, called for an increase in oil and gas production to compensate for losses from Russian exports. The businessman noted that “green” energy solutions do not currently allow this.

The cost of energy resources continues to grow on the fears of investors about interruptions in the supply of Russian raw materials. In addition, gas consumption in the EU is growing against the backdrop of lower temperatures, as well as a decrease in electricity generation through wind generation.

Nevertheless, according to Gazprom, now the transit of gas through the territory of Ukraine through the Yamal-Europe gas pipeline is kept at the maximum of the company’s contractual obligations.

Andrey Syrchin, CEO of CRESCO Capital commented on the situation:

“In general, the global oil and gas industry is on the rise, but due to the impending recession, we expect consumption problems and supply disruptions. Now we would recommend to refrain from investing in the industry. Although prices are near historical highs, most of the profits are taken by taxes and payments. So companies are not always the beneficiaries of high prices!”

New all-time highs set

There are supply problems in the world commodity market caused by the aggravation of the Russian-Ukrainian conflict. Against this background, the cost of many goods has increased markedly.

For the first time since 2013, Brent oil prices exceeded $118 per barrel: on March 3, 2022, May futures traded at $118.02. The cost of WTI exceeded $114 ($114.59). Demand for the Urals, on the contrary, fell significantly due to the sanctions imposed against Russia, and its discount to Brent reached a record high ($15 per barrel).

Oil prices are affected by fears of new sanctions and, as a result, even greater supply disruptions and shortages, as well as the results of yesterday’s OPEC + meeting, where it was decided to continue increasing production by 400,000 barrels per day.

Gas prices are also rising. On Wednesday, a historical record was set – the cost per 1,000 cubic meters was $2,226. At the opening of today’s trading, gas was traded at $2065.9.

The growth of these stock quotes was provoked primarily by soaring oil, as well as Western sanctions against the Russian Federation. In general, according to market data, gas has grown by 59.4%.

The historical maximum was updated by the cost of aluminium. The price per ton rose above $3600 to $3643. Nickel has risen in price to a maximum since 2011 – $26,788.5 per ton. Metal prices are mainly rising on fears of accelerating global inflation.

“I believe that the situation with expensive raw materials will last until the end of the special operation, as well as until the normalization of the situation with payments in Russia. If the conflict continues to escalate, next week we will be able to see extremes in oil and other raw materials,” said Andrey Syrchin, CEO of CRESCO Capital.