Natural gas markets weigh Putin's plans
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Sky-high European natural gas prices are volatile this morning after yesterday's retreat (see chart above) that followed Russian President Vladimir Putin's comments that seemingly signaled more supply in the offing.
What we're watching: What follows the statements about supply from Putin and other Russian officials, in terms of gas via existing infrastructure and the timing of final approval of the Nord Stream 2 pipeline.
- "Market analysts quickly suspected that the offer to increase supplies to Europe was likely intended to put pressure on Germany to certify the Nord Stream 2 gas pipeline," CNBC reports.
Threat level: "Until there is greater clarity on Russia’s gas send-outs to Europe, we expect EU gas prices to remain volatile and skewed to the upside," Goldman Sachs said in a note.
The big picture: The gyrations as traders mull Putin's comments also highlight Russia's geopolitical influence in Europe, which is heavily reliant on Russian gas.
- A New York Times piece calls the gas price surge that's rocking European industry and consumers a "birthday present" to Putin, who turned 69 yesterday.
- They note the Kremlin has "bridled" at European efforts to diversify its supplies, and now "a confluence of events catapulted energy prices to record heights, putting the Russian president in a position to ride to the rescue."
