Last week the quotes of European hubs showed a slight upward trend. At the Ukrainian Energy Exchange, price volatility was high, but in general, the weighted average prices of resources were kept at the level of 5500 UAH per thousand cubic meters.

Last week there were 7 trading sessions on natural gas purchase and sale. A record of 56 million cubic meters of natural gas were put up for trading, 80% of which was September resource. The initiators of trades estimated the cost of a thousand cubic meters of the September resource in the range of 4800-5900 UAH, and the resource of August - in the range of 4800-5500 UAH. On average, the starting price of the September resource was by 125 UAH more expensive than the August. During trading sessions, as a rule, the price increased. As of Friday, the selling price of the resource of August was 5165.79 UAH, and the resource of September - 5390.10 UAH per thousand cubic meters.

Trades were initiated by 11 companies, including PPC, CRAFT ENERGY, UKRNEFTOBURINNIA, etc. New participants are constantly being accredited in the Natural Gas Direction.

On August 22, Smart Energy put up for trading natural gas on the Ukrainian energy exchange for the first time. The company managed to sell 100 thousand cubic meters out of 2.8 mcm of natural gas at the price of 5 350 UAH.

On Friday, August 23, Ukrautogaz on the third attempt managed to buy 3.5 mcm of natural gas of September resource at a price equal to the starting price of 5 300 UAH per thousand cubic meters.

Traditionally, Naftogaz Trading had had the largest sales volume: 22 million cubic meters resources of August and September were sold in a week, over 90 million cubic meters have already been sold since July 5. Last week, the company offered for sale resources of 2 million cubic meters in each position. Naftogaz Trading products were in demand. For example, the company additionally put up natural gas during a trading session and thus sold 0.5 to 2 million cubic meters of natural gas more than the starting volume.

The average weighted prices for the resource of September on all the preliminary agreements concluded on Friday were set at 5474.76 UAH per tcm, and August - 5503,38 UAH per tcm.

Last week the quotes of European hubs started to grow slightly, but then they restored the previous values. Thus, on Friday, August 9, the average quotations of Day 1 among the studied hubs were 128 USD per tcm, the prices of September - by 17% more, the next quarter - by 60% more, the winter season - by 69% more than the current price. It should be noted that market participants expect natural gas prices to cross the mark of 200 USD/tcm in the Q4 2019.

Recently, the prices of German Gaspool have been set below the level of the largest and traditionally "cheapest" TTF hub in Western Europe. Obviously, this is the result of the growth of cheap gas supplies from Russia to Germany, including through Gazprom Export ETP. For example, last week, Gaspool and VTP Slovakia, which are on the border with Ukraine, accounted for the largest sales volumes of Gazprom Export ETP. Mainly, gas is being sold at the ETP with delivery next month, for example, on August 22, sales with delivery in September amounted to 37 million cubic meters.

The recent strengthening of the dollar against the euro and other currencies has contributed to the continued low natural gas quotations in dollars. For example, on August 23, the EURO/USD exchange rate was 1.1083. For comparison, a month ago the rate was 1.1215. This is the result of the growth of the U.S. economy and the deepening of economic downturn in Europe.

Imports remained high last week - about 65 mcm per day, and domestic production at about 55 mcm per day. The technical capacity of imports last week was occupied by 98%, which means that Ukraine maintains the maximum possible level of daily imports of natural gas. UGS holds 17.5 bcm of gas, 23% higher from the same time last year and is the highest since 2012. Gas is injected into the UGS at an active rate - an average of 75 mcm per day. On August 21, Ukrtransgaz stopped injecting blue-sky fuel at four (out of ten) underground storage facilities due to reaching its target volumes for 2019.

Last week, 17 public purchases were held in the form of auctions. In total, budgetary institutions purchased 2.08 million cubic meters of natural gas at an average price of 5.21 UAH per cm (excluding the non-market offer 9 UAH per cubic meter). The largest tender was received by OKKO CONTRACT.

Ukrtransgaz and Moldovagaz, together with the GTS Operators of other countries, agreed on the necessary technical solutions for the creation of new import capacities on the basis of the Trans-Balkan pipeline system in the direction of South-North (reverse of the Transit-1 pipeline). The main purpose of the cooperation is to diversify gas supply routes to Ukraine in preparation for the autumn-winter period 2019/2020. It is expected that as of January 1, 2020, a constant capacity will be created for imports from Romania of 1.5 billion cubic meters of gas per year, regardless of the volume of Russian gas transit through the territory of Ukraine.

In July, the debt for the negative imbalance of the natural gas market reached almost 4 billion UAH. According to the results of July, the negative imbalance that has emerged as a result of operations of market participants is 78.4 million cubic meters of gas, or 473 million UAH. The positive imbalance is 37.0 million cubic meters of gas, or 202 million UAH 80% of the arrears are generated by 20 GDS Operators under the RGC brand. At the same time, 14 regional gas companies have no debts to the GTS Operator, fully paying for gas for production and technological costs. For the five months of the natural gas market operating on a daily basis, the negative imbalances of market participants amounted to 730.0 mcm, or 4 080 mln UAH. During all this time Ukrtransgaz received less than 3% or 109 million UAH from customers of transportation services. The largest debt amounted to 3 888 million UAH or 460.9 mcm, have GDS Operators, of which the debt of enterprises under the RGC brand is 2,995 million UAH, or 346,5 million cubic meters.

PGNiG, a Polish oil and gas company, has been planning large LNG purchases since 2023, said PGNiG chief Petro Wozniak. “To date, we have imported 67 LNG parcels, including eight from the US and eight from Norway. The rest of the supplies were from Qatar. We are preparing to purchase another million tons of LNG in the United States from 2023,” said Wozniak, quoted by Biznesalert in Poland. He stressed that the price of LNG is more competitive than the price of Russian gas. “This is not only a great way to improve the security of gas supplies to Poland, but also a very good business. This gas is much more competitive in price than the one supplied from the east,” said the head of PGNiG.

As previously reported, in June last year PGNiG signed an agreement to purchase 2 million tons of LNG per year from US companies Port Arthur LNG and Venture Global LNG. Both US companies are implementing projects to build LNG terminals in the Gulf of Mexico, scheduled for commissioning in 2022 and 2023.

The Naftogaz Group has launched a new product for domestic consumers "Gas Reserve". Household consumers will be able to buy gas in September at a low summer price and use it during the heating season. “There is a risk that gas will rise in price in the winter as demand for it increases. This is also indicated by current exchange forecasts. Many of our commercial customers have already fixed their gas costs by paying the desired volumes. Now this opportunity is also available for household consumers. Such a product exists in many developed markets,”said Naftogaz Chairman of the Board Andriy Kobolev. Household consumer will be able to purchase up to 25 thousand cubic meters under these conditions. This volume is sufficient to meet the needs of the household throughout the winter. The offer will be available until September 25. The selling price of Naftogaz to gas supply companies (gas sales) under this product is 4874.42 UAH per thousand cubic meters (excl. VAT and shipping and distribution costs).