Energy markets took centre stage this week as demand concerns outweighed supply concerns, dragging prices down. Even the decision by OPEC+ on Monday to cut oil output quotas for October by 100,000 bpd failed to prevent the Brent crude oil price sliding from $94 per barrel to around $92 per barrel at the time of writing. And in the natural gas market, Gazprom’s decision to keep Nord Stream 1 closed indefinitely failed to lead to a sustained rise in European gas prices. Instead, they fell from around €260 per MWh on Monday to around €205 per MWh currently. Whilst demand concerns could persist for some time and push prices even lower, we think lingering supply constraints will put a floor under prices.
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