In Europe, natural gas prices have been volatile during the week with little upside. There was a high trading activity on the UEEX, and the quotations of the natural gas resource also increased.

On the UEEX, during the week participants focused on November’s gas and gas trading in UGS. No position has been created for the sale or purchase of the October’s resource. In total, 13 companies were the initiators of trading, several of which put gas for sale for the first time in October. The starting prices of the December’s resource were in the range of 5590-5750 UAH, the resource of November - 5100-6350 UAH, and the UGS resource - 5250-5650 UAH/tcm. A total of 17 mcm of November’s resource, and 6.6 mcm of UGS resource were sold during the week. Thus, last week at the Ukrainian Energy Exchange ended with the following exchange quotations: 6082,35 UAH for the November’s resource and 5250 UAH per tcm resource in UGS.

Last week, variety of trends in spot price dynamics was observed, but overall prices increased by an average of 8.5% over the week. At the beginning of the week, quotations rose against the backdrop of volatile flows from Norway and weak generation of electricity from Renewables. Quotations for the next month and quarter decreased by 7.6% and 2.9%, respectively. Spot prices in Europe were about 129 USD/tcm, the month-ahead contracts were 32.5% more expensive, the quarter-ahead - 58.9%, the season-ahead - 55.6% more expensive than current spot prices. Spot prices are expected to rise in November amid higher demand but still not reach last year’s level.

Oil prices rose to 61 USD per barrel on Friday, but the week ended with a record fall against the backdrop of the US-China trade war and the risks of not resolving the conflict further.

Natural gas imports amounted to about 52 mcm last week, and fell below the level of domestic production - 55 mcm. The other main indicators of the GTS of Ukraine were significantly influenced by weather conditions. UGS gas injection has decreased by almost 80% from last week, due to the cooling. Consumption increased by 33% to nearly 100 mcm/day. It should be noted that for the same period of 2018, the offtake from UGS has already started, amounting to 0.5 mcm/day. Currently, there is no offtake and gas injection is still continuing, but the injection rate is minimal. There are 21.76 bcm have been accumulated in storages. The decrease in imports is reflected in capacity utilization at the border: a 40% decrease on November 1 compared to last week. Allocated capacity was 34 mcm and accounted for 51% of the technical. The high utilization of capacity at the border with Poland remains, as well as a sharp decrease in other directions - Hungary and Poland.


50 tender procedures were conducted in the form of auctions. In total, about 4mcm of natural gas were sold for the amount of 26 million UAH. The largest contract was won by Dnipropetrovskgas zbut. It will deliver 1.4 mcm of natural gas at the starting price of 4.26 UAH/cubic meter to the Dnipro National University named after Oles Honchar. In general, prices ranged from 4 to 6,7 UAH per cubic meter. The average price was 5 UAH per cubic meter. There were no significant non-market orders.

Denmark has issued a building permit for Nord Stream-2. It is stated that the permit was granted for construction on the continental shelf southeast of Bornholm in the Baltic Sea. The Danish Energy Agency has assessed that this route is the safest and most environmentally friendly. North Stream-2 was virtually completed but Denmark was the last country to issue a building permit. It is expected that North Stream-2 may go live by the end of this year.

Rada approved the law on unbundling. 341 people’s deputies voted for the corresponding decision. The draft lawl is a fulfillment of international obligations and a prerequisite for certification - confirmation of compliance of Ukrainian energy legislation with European. "It guarantees the energy security of Europe, enhances our resilience in the international arena," said Oleksii Honcharuk. At the same time, the Head of Government emphasized that the Ukrainian gas transmission system remains 100% state-owned.

The European Commission has reduced the number of gas-related projects listed as priorities.
The list, published by the EC on October 31, includes 151 drafts and will be considered for approval within two months by the European Parliament and the European Council. It covers 32 gas projects, less than 53, two years ago, and only one was included for the first time: a plan to develop an LNG import terminal in Gdansk, Poland. The reduction in the number of gas projects supported by the EC reflects a shift in the position on the fossil fuel. The European Investment Bank (EIB) that typically helps in financing projects shall decide this month whether to suspend crediting all fossil fuel projects by the end of 2020.