THE GAS MARKET IN EUROPE IN 2021

Although crude oil prices broke through the support level of $90 / bbl for ICE Brent front-month contract in the late of September 2022, the downward swing was very short lived as shocking OPEC+ decision to curb crude oil production quotas by 2.0 mln bbl / d starting November 2022 pushed the price back above the support level. As the oil market failed the attempt to move lower, we are more confident now that there is only a limited downside in crude oil prices below the level of $90 / bbl for ICE Brent, as the supply side will get only tighter in next 3-6 months.

10 2022, Arbat Capital

oil, investment

US banks underperformed the broad market slightly in September 2022, for the third time over the last four months. Moreover, BKX index ended September in the red again, for the 6^th time out of the first 9 months of 2022. BKX index tumbled by 9.4% MoM in September vs -9.3% MoM of SPX index. 

10 October 2022, Arbat Capital

investment, banks;

As the crude oil market is experiencing its largest 90-day decline since March-April 2020, which was only exceeded prior to 2020 by market routs in 2014-15 and 2008-09, we see the limited downside in crude oil prices from the levels achieved and believe that the market would pass its trough before the winter starts as the fundamentals remains rather tight and only would get tighter in a couple of quarters ahead. On the demand side, both the OPEC and the IEA expected a rather robust growth of the global oil consumption in 2023, driven mainly by jet fuel and robust oil use for power generation in the Middle East and in Europe due to record natural gas and electricity prices. In addition, petroleum product markets, especially diesel, are expected to remain in deficit in coming quarters due to downstream capacity constraints outside of China as lower Chinese export quotas have sharply reduced its sales abroad and newly introduced taxes in India have discouraged exports from Asia’s largest supplier. 

09 2022, Arbat Capital

oil, investment