RUSSIA'S GAS FOR EUROPE
BOE - Europe has wanted to wean itself from Russian natural gas ever since supplies from its eastern neighbor dropped during freezing weather in 2009. Almost a decade later, the region has never been more dependent.
Gazprom PJSC, Russia's state-run export monopoly, shipped a record amount of gas to the European Union last year and accounts for about 34 percent of the trading bloc's use of the fuel. Russia will remain the biggest source of supply through 2035, Royal Dutch Shell Plc said last week, echoing comments by BP Plc in January.
EU lawmakers have had their hearts set on diversifying supplies with liquefied natural gas delivered by tanker from the U.S., where production of the fuel skyrocketed last year. So far, those shipments have failed to materialize amid a lack of firm contracts and higher prices outside Europe. Overall, LNG shipments to the region, led by Qatar, were stagnant last year.
"Russia will for sure remain Europe's largest gas supplier for at least two more decades," even if most of the incremental gains in EU imports are met by LNG from somewhere else, said Vladimir Drebentsov, chief economist for Russia and CIS at BP in Moscow.
Gazprom Chairman Viktor Zubkov reiterated on Monday that 2017 European exports are expected to be close to last year's level.
But the company may face greater competition from LNG this summer as its oil-linked prices become less attractive relative to market rates, according to London-based analysts from Energy Aspects Ltd. to BMI Research.
More LNG will arrive in Europe from about mid-year as new plants start producing the fuel in the U.S. and Australia, increasing supply options for customers. Russian gas will also become more expensive after last year's 52 percent gain in Brent crude.
The company has means to remain competitive. After adjusting price formulas in its export contracts, Gazprom has diluted the influence of oil prices in favor of linking revenue to Europe's traded gas markets, a person close to the state-controlled producer said in October. That means its prices will adjust if a sudden inflow of gas from elsewhere depresses the market.
Europe's domestic output is declining because of the natural aging of fields in the North Sea and production limits at the Dutch Groningen field, Europe's biggest.
"There should be space for both increased LNG and Russian gas" in light of shrinking domestic production in the EU and improving demand, according to Christopher Haines, head of oil and gas at BMI Research. That's provided "Russian gas prices continue to evolve to more closely reflect European hub prices," he said.
Any fluctuations in Russian supplies into Europe tend to whipsaw markets. In January 2009, when the dispute with Ukraine last disrupted supplies, U.K. prices soared as much as 27 percent in one day.
Russia has enough reserves to remain Europe's main gas provider for years to come, President Vladimir Putin said in December.
"Gazprom is supplying more gas to Europe than Russia or the Soviet Union ever did," he said. "We have enough gas for ourselves, even considering the growing requirements of the Russian economy, and for our counteragents, the buyers of our gas."
LNG will by 2025 surpass Norwegian gas as a share of supply, with both the liquid fuel and imports from Russia needed to offset declining domestic production, according to Shell, which controls about a fifth of the world's LNG trade. Russia's share of EU gas consumption will rise to 40 percent by 2035 from more than 30 percent now, according to BP.
Gazprom gas sales abroad account for more than 10 percent of Russia's total exports and the company sees its market share holding or rising slightly to about 35 percent by 2025, management board member Oleg Aksyutin told investors in Singapore Tuesday.
Europe will remain Gazprom's "priority market" and no one else can provide gas at the same price, Deputy Chief Executive Officer Alexander Medvedev said at the same event. U.S. LNG costs some 30 percent more than Gazprom's gas in Europe supplied through its "most expensive" route, via Ukraine, Aksyutin said.
"There are so many moving parts now," said James Henderson, an analyst at the Oxford Institute for Energy Studies. "So many more things are happening around the world that have an impact on the European gas market."
|June, 18, 14:30:00|
|June, 18, 14:25:00|
|June, 18, 14:20:00|
|June, 18, 14:15:00|
|June, 18, 14:10:00|
|June, 18, 14:05:00|
IMF - Within the next few years, the U.S. economy is expected to enter its longest expansion in recorded history. The Tax Cuts and Jobs Act and the approved increase in spending are providing a significant boost to the economy. We forecast growth of close to 3 percent this year but falling from that level over the medium-term. In my discussions with Secretary Mnuchin he was clear that he regards our medium-term outlook as too pessimistic. Frankly, I hope he is right. That would be good for both the U.S. and the world economy.
IMF - The near-term outlook for the U.S. economy is one of strong growth and job creation. Unemployment is already near levels not seen since the late 1960s and growth is set to accelerate, aided by a near-term fiscal stimulus, a welcome recovery of private investment, and supportive financial conditions. These positive outturns have supported, and been reinforced by, a favorable external environment with a broad-based pick up in global activity. Next year, the U.S. economy is expected to mark the longest expansion in its recorded history. The balance of evidence suggests that the U.S. economy is beyond full employment.
U.S. FRB - Industrial production edged down 0.1 percent in May after rising 0.9 percent in April. Manufacturing production fell 0.7 percent in May, largely because truck assemblies were disrupted by a major fire at a parts supplier. Excluding motor vehicles and parts, factory output moved down 0.2 percent. The index for mining rose 1.8 percent, its fourth consecutive month of growth; the output of utilities moved up 1.1 percent. At 107.3 percent of its 2012 average, total industrial production was 3.5 percent higher in May than it was a year earlier. Capacity utilization for the industrial sector decreased 0.2 percentage point in May to 77.9 percent, a rate that is 1.9 percentage points below its long-run (1972–2017) average.
IMF - South Africa’s potential is significant, yet growth over the past five years has not benefitted from the global recovery. The economy is globally positioned, sophisticated, and diversified, and several sectors—agribusiness, mining, manufacturing, and services—have capacity for expansion. Combined with strong institutions and a young workforce, opportunities are vast. However, several constraints have held growth back. Policy uncertainty and a regulatory environment not conducive to private investment have resulted in GDP growth rates that have not kept up with those of population growth, reducing income per capita, and hurting disproportionately the poor.