U.S. Rig Count is down 1 from last week to 762, Canada Rig Count is unchanged from last week at 201

Europe is engulfed in an energy crisis fanned by limited supplies from Russia, as well as increased demand amid recovery from the pandemic and a hot and dry summer that has increased the need for cooling.

Gas markets in Europe jumped 6 per cent on Wednesday to €236 a megawatt hour, taking the week’s gains so far to 14 per cent. The latest price was equivalent in energy terms to almost $400 a barrel of oil,

“The still high increase in consumer prices and the expected additional costs for heating and electricity are currently having a particularly negative impact on the prospects for the consumer-related sectors of the economy,” said Michael Schröder, a researcher at the ZEW.

European countries imported on average approximately 400 million cubic meters of gas per day from Russia during the January to July period last year, but imports dropped to 240 million cubic meters per day for the January-July period this year.

According to preliminary data, Gazprom produced 274.8 billion cubic meters of gas from January 1 through August 15, 2022. This is a decrease of 13.2 per cent (or 41.7 billion cubic meters) versus the same period of last year.

Benchmark futures increased as much as 6.5%, after settling 6.8% higher on Monday.

Hungarian foreign minister Peter Szijjarto had traveled to Moscow in late July in an attempt to secure 0.7 Bcm of gas from Russia in addition to the 4.5 Bcm/year of gas it contracted to buy in September 2021.

When Russia invaded Ukraine in March, things went from tightness of supply to impending disaster. Russia, through a complex network of pipelines, is the principal supplier of natural gas to Europe and all petroleum products to Germany. Now it has curtailed normal flows.

Berlin is already under serious pressure after Russia cut flows through Nord Stream 1, the key connector with Europe, which is currently running at just 20 per cent capacity.