Energy Prospectus

Brent crude strengthened above $89 per barrel on Monday at 1PM ET, hovering at the highest levels since January, underpinned by expectations that OPEC+ leaders would extend measures to keep oil supplies tight. Russian Deputy Prime Minister Alexander Novak said on Thursday that Russia agreed with its OPEC partners on the parameters for continued export cuts. Saudi Arabia is also expected to extend its voluntary 1 million barrels per day output cut into October. On the demand side, a surprise expansion in Chinese manufacturing activity as reported by a private survey raised optimism about the economic health of the world’s largest oil importer. Signs that the US economy may be cooling also spurred bets that the Federal Reserve is done hiking rates, lifting overall market sentiment.

WTI crude strengthened above $85 per barrel on Monday, hovering at the highest levels in over nine months, underpinned by expectations that OPEC+ leaders would extend measures to keep oil supplies tight. Russian Deputy Prime Minister Alexander Novak said on Thursday that Russia agreed with its OPEC partners on the parameters for continued export cuts. Saudi Arabia is also expected to extend its voluntary 1 million barrels per day output cut into October. On the demand side, a surprise expansion in Chinese manufacturing activity as reported by a private survey raised optimism about the economic health of the world’s largest oil importer. Signs that the US economy may be cooling also spurred bets that the Federal Reserve is done hiking rates, lifting overall market sentiment.

European natural gas futures dropped to €35 per megawatt-hour, as exceptionally high gas storage levels, decreased demand, and the possibility of worker strikes being averted in Australia outweighed reduced gas supply from Norway due to maintenance. Europe's fuel reserves are at a level of over 90% capacity, which is the highest ever recorded for this time of the year and surpasses the European Union's objective of achieving such storage levels by November 1st. Also, ongoing wage negotiations at major gas facilities in Australia are expected to prevent potential disruptions. On the other hand, maintenance work at Norway's Troll field led to a significant decrease in gas flows. Meanwhile, industrial activity in Germany has been in contraction for 14 consecutive months, a notable indicator of demand destruction, which is impacting the entire continent.