RUSSIAN GAS FOR EUROPE
REUTERS - Russia's Energy Ministry said on Saturday that gas giant Gazprom's intention to terminate contracts with Ukraine poses no immediate threat to natural gas supplies to Europe through Ukraine.
The issue of gas transit has intensified after the Russian group said on Friday it would end the contracts after a Stockholm arbitration court ordered it to pay more than $2.5 billion to Ukrainian energy firm Naftogaz.
Gazprom (GAZP.MM) said on Saturday it had started moves to terminate gas supply contracts with Naftogaz, though Kiev said there had so far been no impact on supplies through its pipelines to Europe.
Gazprom's announcement marked an escalation in a long-running dispute between Moscow and Kiev, which has left Ukraine struggling to stay warm and which the EU has said could threaten gas flows across the continent.
Russia's Energy Minister Alexander Novak told European Commission Vice President Maros Sefcofic in a phone conversation that gas transit would not be at risk until Gazprom and Naftogaz fully terminated their agreement.
"Minister Novak assured that the gas transit from Russia to Europe is under no threat. The transit remains as reliable as in the past," the ministry said.
Gazprom deputy CEO Alexander Medvedev said on Saturday the group had begun proceedings at the same court to carry out the terminations.
"We have started the procedure of terminating contracts with Ukraine's Naftogaz," Medvedev said.
Ukraine's state-owned gas pipeline operator Ukrtransgaz said on Saturday it had had to take additional measures to ensure gas transit to European customers.
Ukrtransgaz spokesman Ihor Kravchyshyn said it had faced"a critical situation" as Russia had kept pressure at the point connecting to the Ukrainian pipeline system at a low level - at least 20 percent below that required by transit contracts.
Ukrainian President Petro Poroshenko said on Saturday Ukraine saw an increase in gas supplies from Poland, Slovakia, and Hungary, which has fully offset the impact of Gazprom's decision.
Gazprom had intended to resume gas supplies to Ukraine for the first time since late 2015 when Kiev started buying gas from Europe to try to cut its energy dependence on Moscow. But the Russian group canceled that plan on Friday.
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U.S. FRB - Industrial production edged up 0.1 percent in July after rising at an average pace of 0.5 percent over the previous five months. Manufacturing production increased 0.3 percent, the output of utilities moved down 0.5 percent, and, after posting five consecutive months of growth, the index for mining declined 0.3 percent. At 108.0 percent of its 2012 average, total industrial production was 4.2 percent higher in July than it was a year earlier. Capacity utilization for the industrial sector was unchanged in July at 78.1 percent, a rate that is 1.7 percentage points below its long-run (1972–2017) average.
NPD - Preliminary production figures for July 2018 show an average daily production of 1 911 000 barrels of oil, NGL and condensate, which is an increase of 64 000 barrels per day compared to June.
GAZPROM NEFT - For the first six months of 2018 Gazprom Neft achieved revenue** growth of 24.4% year-on-year, at one trillion, 137.7 billion rubles (RUB1,137,700,000,000). The Company achieved a 49.8% year-on-year increase in adjusted EBITDA, to RUB368.2 billion. This performance reflected positive market conditions for oil and oil products, production growth at the Company’s new projects, and effective management initiatives. Net profit attributable to Gazprom Neft PJSC shareholders grew 49.6% year on year, to RUB166.4 billion. Growth in the Company’s operating cash flow, as well as the completion of key infrastructure investments at new upstream projects, delivered positive free cash flow of RUB47.5 billion for 1H 2018.
REUTERS - Front-month Brent crude oil futures LCOc1 were at $72.34 per barrel at 0648 GMT, down by 12 cents, or 0.2 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 23 cents, or 0.3 percent, at $66.81 per barrel.