September is normally a ‘shoulder’ season in the oil and gas markets, but this year is different.
That’s according to energy and environmental geo-analytics company Kayrros, which highlighted the effects of the conflict in Ukraine on the markets.
“A shoulder season [is] a relatively subdued transition period between the twin demand peaks of the Northern hemisphere, on the one hand the summer driving season, with its cyclical spike in cooling, recreational driving, and air travel, and on the other hand the winter heating season and its surge in distillate burn, including heating oil,” Kayrros noted in the report.
“This year is different, though, as the effects of Russia’s invasion of Ukraine and its steep reduction in gas exports to Europe overshadow seasonal factors,” Karros added.
In the report, Kayrros outlined that LNG has been in high demand ever since the invasion of Ukraine and said liquefaction plants have been running flat out through the summer, which the company highlighted is normally a maintenance season.
“This suggests record gas prices may have led some plants to defer routine maintenance – potentially a recipe for unplanned outages as we head into the peak heating season when the shutdown of the Nord Stream pipeline from Russia to Europe is expected to boost demand for LNG even further,” Kayrros warned.
In a statement on its Twitter page on September 2, Gazprom revealed that gas transmission via the Nord Stream gas pipeline had been fully shut down.
In a separate report sent to Rigzone earlier this month, Kayrros outlined that the driving season in the U.S. was “uncharacteristically tepid”, with gasoline demand “significantly below last year”.
“But while the summer demand bump was modest, so too was the late-August decline … Demand eased back seasonally but narrowed its year-on-year deficit, starting September back at last year’s level,” Kayrros added in that report.
Russian forces escalated a conflict with Ukraine back in February.
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Published at Tue, 27 Sep 2022 01:11:26 -0700