Page 121 - RusRPTSept22

$97/bbl as of this morning, with the price action generally attributed to a surprise build in crude stocks in the US rather than the prospect of higher OPEC+ production.
Little OPEC+ capacity remains, outside of Russia: At this point, OPEC+ countries have little spare production capacity, so a large increase next month was next to impossible in any event, despite heavy lobbying on the part of the Biden Administration for higher output ahead of the November midterm elections. The exception, of course, is Russia, which due to sanctions-related pressure on its oil exports is running well below its own quota under the OPEC+ agreement. In our opinion, oil markets remain caught between two countervailing forces – a fundamentally undersupplied oil market on one hand, which is being helped by unsustainable 1mmbpd withdrawals from US Strategic Petroleum Reserves (SPR), and a rapidly worsening outlook for global economic growth on the other (the US entered a recession after booking its second straight quarter of negative growth in 2Q22). Meanwhile, oil markets reacted sharply to US weekly data that showed a substantial build in commercial stocks of crude (that is, excluding the SPR) and gasoline.
Russia will not resume oil supplies via the Druzhba pipeline to the Czech Republic after they were cut off on August 4 due to a payment of transit tariffs dispute, aide to Transpetrol CEO Linda Vaskovicova said. "Oil supplies to the Czech Republic will not resume," the official said without elaborating.
Europe faces new interruptions in the supply of oil after the Caspian Pipeline Consortium (CPC), which supplies oil from Kazakhstan via Russia to global markets, announced the suspension of exports from two of its three oil loading docks on August 22. According to the company, the reason was damage to pipeline devices. The operator of the main oil export route from Kazakhstan to the EU announced for the second time this summer a decrease in oil exports at the request of shippers. "The use of one remote mooring device will now allow us to fulfil the requests of shippers at reduced volumes," the consortium said. As Reuters writes, the operator can serve less than 70% of the terminal's average capacity through one berth. Kazakhstan, which uses the CPC as a major route for oil exports, is at risk of production cuts.
9.1.1c Gas sector news
After Gazprom's statement, the price of gas soared to $3,000. Russia's Gazprom announced that it was suspending the operation of Nord Stream 1 for three days, from August 31 to September 2, allegedly due to repairs. As a result, Monday’s gas price on the European market exceeded the $3,000 per thousand cubic metres mark. The price of September TTF futures on the ICE Futures exchange reached $3,240 per thousand cubic metres. A week ago, Gazprom voiced expectations that gas prices will rise to $4,000 per thousand cubic metres in the winter quotations. The record gas price in Europe was
121 RUSSIA Country Report September 2022 www.intellinews.com