Ekonomi

Great news in perspective

Possible Russian forced production cut from OPEC+ A source close to Russia said on tuesday that Russia is likely to propose OPEC+ cut oil production by around 1 million barrels per day at its next meeting in october.

The meeting will take place on October 5 amid falling oil prices and months of severe market volatility, prompting another OPEC+ producer, Saudi Arabia, to say the group may cut production.

Uniting OPEC countries and allies like Russia, OPEC+ has refused to increase production to lower oil prices, despite pressure from major consumers, including the United States, to help the global economy.

However, prices have fallen sharply this month due to fears about the global economy and the rise in the US dollar after the Fed raised rates.

Brent crude oil prices, which were already trading high on Tuesday due to supply disruptions in the US Gulf, rose further on news of possible Russia’s bid, with the contract rising nearly 4% to $87.15 a barrel.

The impact of any OPEC+ deal to cut production is likely to be mitigated as many members of the group are unable to produce within their agreed-upon targets.

In August, OPEC+ was producing 3.58 million barrels below its targets as its members struggled with sanctions and underinvestment.

Earlier this month, JP Morgan said it believes OPEC+ may need to intervene in a cut of up to 1 million bpd “to halt the downward momentum in prices and realign the physical/futures markets”.

“Only a production cut by OPEC+ could break the negative momentum in the short term,” said UBS analysts Giovanni Staunovo and Wayne Gordon.

Russia is facing difficulties in sustaining oil production due to Western sanctions on the energy and financial sectors after sending troops to Ukraine earlier this year. The West accuses Russia of invading Ukraine, but the Kremlin calls it a special military operation.

Saudi Arabia did not condemn Moscow’s actions amid its difficult relations with the administration of US President Joe Biden.

The Kremlin said Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman spoke last week, praising efforts within the framework of OPEC+, confirming their intention to stick to existing agreements.

 Interruptions in Nord Stream 1 gas flows. Any intentional disruption to EU energy networks would be met with a “robust and unified response”, after many states said two Russian pipelines to Europe had been hacked, causing gas to spill into the Baltic Sea. Said it would be done.

It was far from clear who might be behind leaks or any fouls in the Nord Stream pipelines that Russia and European partners spent billions of dollars to build.

Russia, which cut gas supplies to Europe after the West imposed sanctions over Moscow’s invasion of Ukraine, said there was also the possibility of sabotage.

“The deliberate disruption of the European energy infrastructure is absolutely unacceptable and will be met with a firm and unified response,” said Joseph Borrell.

In a statement from the Russian embassy in Denmark, it was stated that any sabotage of Nord Stream’s pipelines is an attack on the energy security of both Russia and Europe.

After meeting with NATO Secretary General Jens Stoltenberg, the Danish defense minister said there are reasons to be concerned about the security situation in the region.

“Russia has a significant military presence in the Baltic Sea region and we expect them to continue to swing swords,” Morten Bodskov said in a statement. said.

Norwegian police said on Wednesday they have increased security around the country’s oil and gas facilities, while Danish authorities have called for increased preparedness in the country’s energy and gas sector.

The volume of gas bubbling from the Nord Stream 1 pipeline in the Baltic Sea was unchanged from the previous day on Wednesday, the Swedish Coast Guard said in an email to Reuters.

Dane Bodskov said it may take a week or two before the areas around the leaks are calm enough to be investigated, but there are differing opinions on possible repairs.

Jens Schumann, managing director of gas pipeline network company Gasunie Deutschland, said: “There are good teams to deal with pipeline accidents, there are emergency pipe inventories and experts on land and at sea.”

But German safety agencies fear that Nord Stream 1 will be rendered unusable if large volumes of salt water flow into the pipes and cause corrosion, German newspaper Tagesspiegel cited government sources.

Sweden’s Attorney General’s Office said it would review materials from a police investigation and decide on further action, after Swedish Prime Minister Magdalena Andersson announced on Tuesday that two explosions had been detected.

Andersson said that although this does not represent an attack on Sweden, Stockholm is in close contact with partners such as NATO and neighbors such as Denmark and Germany.

Seismologists in Denmark and Sweden said on Monday they recorded two powerful explosions near the leaks, and that the eruptions were in the water, not below the seafloor.

Mysterious leaks reported from Nord Stream gas pipelines… Source: European Network of Transmission System Operators for Gas, Danish and Swedish maritime authorities, Reuters

 -Gas flows

 No pipeline was pumping gas at the time the leaks were detected, but there are also concerns about pipelines through Ukraine as events upset the remaining expectations that Europe can get fuel via Nord Stream 1 before winter.

“One development that could have a more rapid impact on gas supplies to Europe was a warning from Gazprom that Russia could impose sanctions on Ukraine’s Naftogaz due to continued arbitration,” analysts at ING Research said. said.

The Ukrainian energy firm will continue its arbitration proceedings against Gazprom over Russian gas flowing through the country, Naftogaz’s CEO said on Wednesday.

Gazprom said earlier this week that while it denied all of Naftogaz’s claims in arbitration, it could impose sanctions on the company if it continued the case.

ING analysts: “The risk is that these flows will come to a complete standstill, which will only tighten the European market further as we move into the heating season.”

European gas prices soared after news of the leaks. The Benchmark October Dutch price was up 11% on Wednesday to 204.50 euro/megawatt hour. While prices are still below this year’s highs, they remain more than 200% higher than in early September 2021.

Russia reduced gas supplies to Europe via Nord Stream 1 before completely suspending gas flow in August, accusing Western sanctions of causing technical difficulties. European politicians say this is an excuse to stop gas supplies.

The new Nord Stream 2 pipeline had not yet entered commercial operations. The plan to use it to supply gas was shelved by Germany days before Russia began what it calls a “special military operation” in Ukraine in late February.

Hurricane IAN. Hurricane Ian is poised to become one of the costliest storms in US history, leaving a devastating trail of flooding and power outages in Cuba and threatening to slam Florida’s west coastline with winds of 125 miles per hour.

The storm is expected to strengthen by Wednesday, bringing 8-foot storm surges to Tampa Bay and heavy rains in the US Southeast.

Chuck Watson, a disaster modeler at Enki Research, said that if the current forecast is met, damage and economic losses in the region could reach $45 billion to $70 billion.

Beyond the borders of Florida and neighboring states, the storm is likely to intensify food inflation as Ian directly targets key orange growing and fertilizer producing regions.

Maxar Technologies Inc. According to meteorologist Donald Keeney, at least 75% of the state’s orange groves are threatened. Bloomberg Intelligence analyst Alexis Maxwell, meanwhile, told Mosaic Co., a major east of Tampa. He said phosphate plants are also at risk.

Floods, landslides and power outages were triggered Tuesday after it hit western Cuba, the heart of the island’s tobacco industry, Ian said.

-In terms of fertilizers…

Hurricane Ian is poised to hit the nation’s phosphate fertilizer production and threatens supply as the cost of growing food in the US is rising at its highest rate ever.

Florida is home to the phosphate rock assets from which Mosaic Co. extracts and plants where they convert this rock into fertilizers such as diammonium phosphate and monoammonium phosphate, commonly known as DAP and MAP.

Fertilizer can make or break crop production. Global food prices have reached records in recent months as inflation fluctuates in economies and hunger levels increase. The cost of growing food in the United States will rise at the highest rate ever in 2022, as the Russian invasion of Ukraine puts a large percentage of the world’s supply at risk.

Bloomberg Intelligence analyst Alexis Maxwell said the US tax on Russian and Moroccan phosphate producers means the country will have to rely on more expensive imports if local production goes offline for long periods of time. Maxwell said Hurricane Irma in 2017 affected phosphate production, when Mosaic lost 400,000 mt of phosphate product and Potash Corp.’s White Spring plant halted operations for four days.

Mosaic owns more than half of the 15.86 million mt of DAP and MAP production capacity in the US, mostly in Florida, according to Bloomberg Intelligence.

-Impact on food prices

 Mosaic Co., which mines phosphate and potash and uses them to make fertilizers, is headquartered in Tampa. In a memo, the company said its North American phosphate operations account for “about 50% of North American farmers’ granular phosphate fertilizer supply and 12% of the global supply” in a given year.

“In anticipation of significant impact from Hurricane Ian, we have taken appropriate steps to protect our people, mines, factories, port facilities and administrative offices,” Mosaic told FOX Business.

Hurricane-related cuts to fertilizer supply could cause food prices, already hit by inflation, to soar further as many farmers use them to help grow crops. For farmers, extreme weather conditions, supply chain problems and geopolitical tensions are some of the factors that contribute to rising food prices.

The “fake” referendum results. All the governments established by the Kremlin in the four Russian-occupied regions of Ukraine declared victory in the so-called annexation referendums.

Officials claimed on Tuesday evening an unprecedented majority of residents said yes to joining Russia.

In a few days, Moscow can formally claim regions that make up about 15% of Ukraine. According to Reuters, Russia’s parliament set aside October 4 to consider annexation.

Polls, announced by Russian President Vladimir Putin last Wednesday, along with partial mobilization, have been spoofed by the West.

In Kherson, the chairman of the voting committee got the “yes” vote to over 87%.

Luhansk officials said that 98.4% of the people there voted to join Russia. In Zaporizhzhia, a Russian-appointed official put the figure at 93.1%.

Denis Pushilin, president of the self-proclaimed Donetsk People’s Republic, said that 99.2% of respondents in the region voted to join Russia.

“Referendums are over. The results are in. Welcome home, to Russia!” Dmitry Medvedev, a former president of Russia who serves as vice-chairman of the Security Council of Russia, wrote to Telegram.

Ukrainian media pointed out that the population figures quoted by Russian-based authorities are inaccurate, as about 80% of pre-war residents either left Ukraine as refugees or were internally displaced in other parts of the country.

-What now?

 Denis Pushilin, head of the Russia-backed separatist People’s Republic of Donetsk, said the next steps would be to sign an annexation agreement to be ratified by the Russian legislature.

Officials appointed by Russia took the ballot boxes from house to house, which both Ukraine and the West said were a coercive exercise to create a legal pretext for Russia to annex the regions.

Earlier, Moscow had said it would give “full protection” to Ukraine’s annexed areas, which could include the use of its nuclear arsenal because the legal pretext allowed Putin and the Kremlin to portray Ukraine’s attempt to recapture these areas as an attack on Russia itself. would give.

Ukraine has repeatedly warned that Russia’s annexation of additional territory would eliminate any chance of peace talks, seven months after Moscow launched its full-scale invasion of the country in late February.

 Conclusion? Well the news is a disaster globally from the pipeline sabotage to the fake referendum and now the hurricane, not to mention what’s going on in Iran… it just announces the color of what winter will be like.

No pipeline was pumping gas at the time the leaks were detected, but there are also concerns about pipelines through Ukraine as events upset the remaining expectations that Europe can get fuel via Nord Stream 1 before winter.

European gas prices soared after news of the leaks. The Benchmark October Dutch price was up 11% on Wednesday to 204.50 euro/megawatt hour. While prices are still below this year’s highs, they remain more than 200% higher than in early September 2021.

Meanwhile, Putin is sending young Ukrainians fighting against their peers in four regions. Referendums are seen by everyone as a hoax. People had to vote under military pressure from the Russians, who carried weapons to their doorstep.

And if that wasn’t enough already, a soon-to-be category 5 hurricane has hit the Southeast coast of the United States, where more than 50% of the country’s fertilizer is produced and accounts for about 12% globally. Not only are food prices high already, we can’t expect them to go down any time soon.

Kaynak: Tera Yatırım-Enver Erkan
Hibya Haber Ajansı

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