Global Energy Tit-Bits

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EU Not Expecting Russia to Restart Nord Stream Flows After July 21

European Union is bracing for the possibility that Russia will not resume natural gas supply through Nord Stream when the maintenance exercise ends on July 21.

A European Commissioner, Johannes Hahn, said yesterday (Tuesday) in Singapore, “We’re working on the assumption that it doesn’t return to operation.” Europe is increasingly concerned that it may have to resort to rationing gas supplies this winter.

The European Commission is working on all contingency scenarios: that Gazprom would no longer deliver any gas to Europe. “We are basing our winter preparedness plans on the worst possible scenario,” a Commission spokesperson told Reuters on Tuesday.

The Commission said it is unveiling today measures to conserve gas, which could include financial incentives for industrial users and utilities to cut gas consumption or switch to other fuels for production and power generation, respectively.

The EC could propose emergency powers that would include binding in natural gas consumption in case of supply emergencies such as a complete stop of Russian gas.

France Bails Out Energy Giant EDF

France said yesterday that it is launching a simplified takeover offer to buy for $10 billion all the 16% in energy giant Electricite de France (EDF). The firm is already owned 84% by the French government, which said earlier this month that it wants to fully nationalize the energy giant. Individual and institutional investors own 15% of EDF.

EDF has seen difficult times in recent amid piling debts, cost overruns on major nuclear power projects in France and the UK, and issues at its nuclear in France.

In the offer announced today, the French is offering shareholders of the outstanding shares $12.29 (12 euro) per share, or a premium of 53% EDF’s closing price on July 5, a day before Prime Minister Elisabeth Borne announced the government’s plan for full nationalization.

Shares in EDF (EPA: EDF) were suspended from trade for a week pending the announcement of the offer and jumped as much as 15% by the early afternoon in Paris today at the resumption of the trade, after the government said it intended to launch the takeover offer.   

Oil Prices Unmoved By Small Crude, Gasoline Build

The American Petroleum Institute (API) reported a build this week for crude oil of 1.860 million barrels, while analysts predicted a build of 333,000 barrels. The build comes as the Department of Energy released 5 million barrels from the Strategic Petroleum Reserves in Week Ending July 15, to 480.1 million barrels.

U.S. crude inventories have shed some 61 million barrels since the start of 2021, with a 1.83 million barrel gain since the start of 2020, according to API data. In the week prior, the API reported a build in crude oil inventories of 4.762 million barrels after analysts had predicted a draw of 1.933 million barrels.

WTI was trading up on Tuesday as fears of the tight market take recession fears—at least for today. WTI was trading up 1.32% on the day at 2:09 p.m. ET in the runup to the release at $104 per barrel—a rise of roughly $8.50 on the week. Brent crude was trading up 1.02% on the day at $107.30—a nearly $8 rise on the week.


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