US President Joe Biden announced an embargo on US oil and gas imports on Tuesday. Europe, much more dependent on Russian extractions, is more cautious.
Oil prices fell on Wednesday and European gas prices, much more volatile, melted, investors believe that the possibility of a European embargo on Russian hydrocarbons has diminished despite the continued fighting in Ukraine.
Around 11:20 a.m. GMT (12:20 p.m. in Paris), a barrel of Brent from the North Sea for delivery in May fell 1.75% to 125.74 dollars.
The barrel of West Texas Intermediate (WTI) for delivery in April lost 1.94% to 121.30 dollars.
The benchmark for the European natural gas market, the Dutch TTF, fell 18.09% to 175.75 euros per megawatt hour.
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The extreme volatility of the market no longer surprised investors: the price of gas has lost 50% since its peak reached Monday at 345 megawatt hours, but remains up 147% since the beginning of the year.
Start of the week, “the market had bet on the possibility that the Russian supply would disappear completely, either with a (European) embargo or a halt to exports from the Nord Stream 1 gas pipeline by Russia. These scenarios are less likely so the risk premium decreases a little“, explains to AFP Richard Gorry, analyst at JBC Energy.
Imports “essential» for Europe
US President Joe Biden announced on Tuesday an embargo on US oil and gas imports but Europe, much more dependent on Russian extractions, is more cautious.
Read alsoWar in Ukraine: Joe Biden announces an embargo on Russian gas, oil and coal
The European Commission proposed Tuesday to the Twenty-Seven to diversify their supplies, inflate their reserves and reduce their energy consumption, and the EU is just aiming for a two-thirds reduction this year in its purchases of Russian hydrocarbons.
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The fall in gas prices started on Monday when the German Chancellor acknowledged that Russian gas imports were “essentialfor Europe.
But a reversal of the situation remains possible: “the risk of serious trade disruptions is high as long as the conflict continuesBarclays analysts warn in a note.