16 Jun 2014
Energy roundup: Iraq supply concerns, Ukraine ultimatum
FXStreet (London) - Brent crude prices have rallied strongly on continuing escalation of the unrest in Iraq while gas prices are under pressure over threats from Russia to block gas supplies to the Ukraine.
Iraq conflict continues
Brent futures for August delivery broke above USD114 on Friday – a nine-month high – as insurgents strengthened their hold on the north of Iraq.
An Iraqi military spokesman announced yesterday that the army had killed 279 “terrorists”. However, on the same day, insurgents took control of Turkmen in north-western Iraq after heavy fighting.
The threat of civil war in OPEC’s second-biggest oil producing country has ignited fears of a squeeze on supply, driving up prices.
Brent futures for August delivery are currently trading at USD113.02/bbl, up 0.5 percent on the session.
Ukraine ultimatum
Russian state-owned gas producer Gazprom has threatened to cut supplies to the Ukraine if it does not settle part of its debts. Gazprom warned that it would cut its supplies to the Ukraine if it did not pay USD1.95bn of the USD4.5bn owed before 06:00 GMT.
With the deadline having passed this morning, there seems to be no sign that Kiev has complied with Gazprom’s demands.
“Today, from 10:00 Moscow time, Gazprom, according to the existing contract, moved Naftogaz [Ukraine's state-owned company] to prepayment for gas supplies," said Gazprom in a statement.
“From today, the Ukrainian company will receive Russian natural gas only in the amounts it has paid for.”
The ultimatum comes after Gazprom gave the Ukraine an extension to settle its debts after receiving a part-payment of USD789m. The Ukraines delay in settling the bill follows an 80 percent rise in prices after the the discount negotiated by former Ukranian president Viktor Yanukovych expired in April.
July natural gas contracts are currently trading at USD4.79/MMBtu.
Iraq conflict continues
Brent futures for August delivery broke above USD114 on Friday – a nine-month high – as insurgents strengthened their hold on the north of Iraq.
An Iraqi military spokesman announced yesterday that the army had killed 279 “terrorists”. However, on the same day, insurgents took control of Turkmen in north-western Iraq after heavy fighting.
The threat of civil war in OPEC’s second-biggest oil producing country has ignited fears of a squeeze on supply, driving up prices.
Brent futures for August delivery are currently trading at USD113.02/bbl, up 0.5 percent on the session.
Ukraine ultimatum
Russian state-owned gas producer Gazprom has threatened to cut supplies to the Ukraine if it does not settle part of its debts. Gazprom warned that it would cut its supplies to the Ukraine if it did not pay USD1.95bn of the USD4.5bn owed before 06:00 GMT.
With the deadline having passed this morning, there seems to be no sign that Kiev has complied with Gazprom’s demands.
“Today, from 10:00 Moscow time, Gazprom, according to the existing contract, moved Naftogaz [Ukraine's state-owned company] to prepayment for gas supplies," said Gazprom in a statement.
“From today, the Ukrainian company will receive Russian natural gas only in the amounts it has paid for.”
The ultimatum comes after Gazprom gave the Ukraine an extension to settle its debts after receiving a part-payment of USD789m. The Ukraines delay in settling the bill follows an 80 percent rise in prices after the the discount negotiated by former Ukranian president Viktor Yanukovych expired in April.
July natural gas contracts are currently trading at USD4.79/MMBtu.