Oil rises and gas falls due to tensions over crude oil supply | Finance | Economy
Oil prices continued to rise on Monday, in a market fearful of a drop in supply, while natural gas benefited from the first positive sign from Germany in a long time.
(Elon Musk calls for more oil and gas as a bridge to renewables).
In London, the price of a barrel of North Sea Brent for October delivery gained 4.05% to settle at $105.09. In New York, the barrel of American West Texas Intermediate (WTI), also due in October, rose 4.24% to settle at 97.01 dollars.
Oanda’s Edward Moya estimated that the market was driven by fears of a deteriorating situation in Libya – where there were clashes between armed groups that left 32 dead over the weekend – as well as a reduction in production by the Organization of Petroleum Exporting Countries (OPEC).
“A civil war (in Libya) would jeopardize exports” from that North African country, Moya said. Last year Libya exported about 1.1 million barrels a day, according to the US Energy Information Agency.
(Tourism should triple to replace oil: experts).
Meanwhile, there are prospects that the OPEC and its OPEC+ allies announce a production cut at their next meeting on September 5. Mizuho’s Robert Yawger expects them to announce a cut of half a million barrels a day from their production target.
Another factor of concern is Iraq, the sixth largest oil producer in the world, where this Monday there were clashes in the Green Zone of Baghdad, headquarters of the institutions, invaded by supporters of the Shiite leader Moqtada Sadr.
Added to all this is a new obstacle to revive the nuclear deal with Iran 2015, after President Ebrahim Raissi said that reviving that pact “would be pointless” without the closure of the International Atomic Energy Agency (IAEA) investigation into the country’s undeclared sites.
(Ecopetrol, the seventh company that pays the most dividends in the world).
“Speculators feel that nothing is going to happen soon”, which further boosts the price of crude oil. In the natural gas market, the Dutch TTF, a reference for the European market, plummeted and lost 21% in the session before recovering a little.
For Yawger, this is a direct result of ad from germany that its gas reserves were being filled “faster than expected”, in the words of Economy and Climate Minister Robert Habeck.