Russia Prepares Shutdown of Nord Stream 1 Natural Gas Pipeline
July 11, 2022
The Baker Hughes Rig Count had oil rigs up 2 to a total of 597 and last year at this time there were 378 oil rigs. Oil rigs are at their highest level since March 2020.
WTI and Brent crude oil prices rose significantly on Friday by 2.0% or more due to a much better than expected US jobs report signaling higher fuel demand and oil supply tightness continuing to put upward pressure on crude oil prices.
The struggle between supply concerns and demand continues. The demand side is trying to deal with recession fears and more covid cases in China. Will these issues lead to lower demand and help the market buy time to build more supplies? If demand continues strong and pushes aside covid concerns and recession fears and demand continue to be strong, then the question is will there be enough supplies. Solid demand should support price.
Russia has reduced Nord Stream 1 gas flows to 40% of capacity and is set to completely shut off for 10 days due to maintenance. European countries are worried that Russia may not restart the pipeline after maintenance, but Russia has said that this is a “regular event” for the pipeline.
Distillates inventories decreased by 1.3 million barrels week over week and are about 20% below the five-year average for this time of year.
Propane inventories increased by 900,000 barrels week over week and are 16% below the five-year average for this time of year.