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5/7/14

Ukraine Crises: Europe Gas Options Seen Limited by Costs at $200 Billion - by Anna Shiryaevskaya and Isis Almeida

“In the short-term, there isn’t really a whole lot they can do,” Thomas Pugh, a commodities economist at Capital Economics in London, said yesterday by phone. “Energy security was taken as a given and it wasn’t something people were talking about a few months ago.”

Negotiators from Russia, Ukraine and the European Union agreed to guarantee no disruptions in gas supply through the end of this month, EU Energy Commissioner Guenther Oettinger said last week after a meeting between the three parties in Warsaw.

Europe can cope with a 90-day interruption in flows from Ukraine, assuming “reasonably high” stockpiles, cooperation between European states and normal flows of Russian gas through routes other than Ukraine, consultant Poeyry Oyj said today in an e-mailed report.

European gas prices have fallen 33 percent since Feb. 28, the last trading day before Russia took control of Ukraine’s Crimea region. U.K. front-month gas, the benchmark European contract, fell as much as 1.8 percent today to 44.91 pence a therm ($7.62 a million British thermal units), its lowest since September 2010 as milder-than-normal weather and above-average storage levels offset the threat of supply disruptions.

Read more at: Europe Gas Options Seen Limited by Costs at $200 Billion - Bloomberg

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