Latest news with #RussellHardy
Yahoo
30-03-2025
- Business
- Yahoo
Europe Gas Sector Enters Crucial Period After Winter Sapped Stocks
(Bloomberg) -- Europe's gas sector is entering a crucial few months as the end of the heating season starts the clock ticking to fill storage facilities that are emerging from winter two-thirds empty. Gold-Rush Fever Returns to Historic New Zealand Mining Town What Frank Lloyd Wright Learned From the Desert How SUVs Are Making Traffic Worse Bank Regulators Fight for Desks as OCC Returns to New York Tower These US Bridges Face High Risk of Catastrophic Ship Strikes Normally, traders can be expected to play a key role in refilling inventories because fuel is typically cheaper in summer, allowing them to turn a profit by storing large volumes, ready to sell when demand rises again next heating season. But this year is far from normal. The first really cold winter since Europe lost most of its piped supplies from Russia has depleted reserves faster than usual, and was further exacerbated when remaining flows through Ukraine came to a halt in January. The tightened market has driven summer gas prices persistently higher than those for next winter, which – crucially – removes the financial incentive for storage trades. One key question is what role governments will play to ensure the facilities are refilled — and at what cost. Of course, there's still plenty of time before next winter arrives. But traders say the first few weeks of April will provide an indication of whether the various market participants are ready to start reinjecting gas despite the potentially unprofitable price structure, or if they intend to play a waiting game. 'Some solution needs to be found in the short term to get storage injections started even though the prices are inverted today,' said Russell Hardy, chief executive officer of energy trading giant Vitol Group. There's a debate in the market over 'who is going to perform this task,' he added. The stakes are high: Going into winter without storage nearly full would leave the region exposed to intense prices spikes if it's hit with extra cold weather or other unexpected factors. European Commission rules stipulate that storage sites need to be 90% full by Nov. 1. However, recent proposals and discussions about flexibility on the timing of the targets have created huge uncertainty about how the rules will be implemented, sending prices swinging and keeping traders guessing. Benchmark futures have retreated in recent weeks amid speculation that the refilling targets may be loosened, as well as optimism for a ceasefire in Ukraine. In fact, if the war were to end soon and lead to a return of some flows from Russia, prices would likely drop, but such a prospect seems distant. For now, gas prices are roughly 50% higher than a year ago — at just over €40 a megawatt-hour — and will probably need to remain at current levels or higher to attract enough liquefied natural gas during the summer, Hardy said. If Europe is lucky, Chinese demand for fuel will remain weak in the coming months and give Europe a better shot at attracting shipments. BloombergNEF expects Chinese purchases to fall this year for the first time since 2022. But Europe will still have to pay up to keep attracting cargoes. Should prices fall closer to $12 per million British thermal units — about a $1 lower than where they are now — LNG would flow to Asia, where buyers are more price sensitive, according to Hardy. High enough prices could help draw in more seaborne supplies to eliminate the seasonal spread, with prices for the first few winter months already starting to normalize a bit. An additional challenge is that Ukraine also needs to import up to five times more gas than in previous seasons this year after fighting damaged a lot of its infrastructure. Governments will face a tricky tradeoff if injections proceed too slowly. Acting too late could result in the region not building up a sufficient fuel buffer, or having to spend huge amounts of money to get supplies — as Germany did in 2022. But interventions also risk jolting the market further. Germany's gas market manager shocked traders in January when it presented a proposal to subsidize unprofitable storage deals — a move that drove summer prices dramatically higher. Two months later, it has yet to clarify how or whether it plans to proceed. Meanwhile, Italy brought forward its gas storage auctions to as early as February. What Bloomberg Intelligence Says: 'European storage levels will reach about 87% full by Nov. 1, according to Bloomberg Intelligence's base case scenario which assumes no return of Russian flows via Ukraine, LNG imports rising by at least 40% on year this summer, and no changes to storage targets.' — Patricio Alvarez, senior analyst A warm spring — as is currently forecast — could help injections pick up, as could signals from Brussels that it will apply a more flexible approach to storage rules, which some EU member states are pushing for. 'The key question is whether there will be a change in regulation and if this is the case, how much time there will be to react to such a change,' said Marco Saalfrank, head of continental Europe merchant trading at Swiss utility and trader Axpo Holding AG. If a change is only communicated around mid year, 'there will be just a few months to inject, which could have an impact on prices.' --With assistance from John Ainger, Ewa Krukowska, Eva Brendel, Tom Fevrier, Joe Wertz and Archie Hunter. Trump's IRS Cuts Are Tempting Taxpayers to Cheat Google Is Searching for an Answer to ChatGPT Israel Aims to Be the World's Arms Dealer Business Schools Are Back How a US Maker of Rat-Proof Trash Bins Got Boxed in by Trump's Tariffs ©2025 Bloomberg L.P.
Reuters
25-03-2025
- Business
- Reuters
Trading house bosses see long route back for Russian energy
LAUSANNE, March 25 (Reuters) - Any lifting of sanctions on Russian energy is likely to be slow and patchy, meaning a return of its oil and gas to markets beyond Asia would likely be modest in the short term, the bosses of the world's biggest trading houses said on Tuesday. The heads of Vitol, Mercuria, Trafigura and Gunvor, which used to dominate Russian oil trade before the 2022 invasion of Ukraine, told the FT Commodities Global Summit in Switzerland they would be extremely cautious about trading Russian volumes. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. But none of them ruled out touching Russian energy, highlighting a dramatic change of approach being considered by the industry after U.S. President Donald Trump upended U.S. policies towards both Russia and Ukraine. "We do think it's going to be a year or two," Vitol CEO Russell Hardy said of Europe's easing its sanctions regime. "You're probably going to see some changes to pipeline flows, some countries may choose to import oil and others choose not to," he added. Trafigura CEO Richard Holtum said the U.S. could be the first to lift sanctions, while EU and UK restrictions would stay in place for longer. "You would need to see a wholesale winding back of all the sanctions before it's something that could even be considered." The White House has already begun to draw up plans to give Russia sanctions relief as part of Trump's effort to end the war in Ukraine, while European officials said recently they would seek to avoid Russian oil even if sanctions were eased. Gunvor CEO Torbjorn Tornqvist said Russia may not wish to return to the pre-war status quo of signing long-term contracts with traders and oil firms to handle shipping and marketing, given the efforts it made since 2022 to build its own, opens new tab commodity trading system. "They have their own ways now, use their own controlled system to bring oil to the markets." Tornqvist added that Russia would likely prioritise regaining access to Western banking and payment systems to facilitate trade in sanctions negotiations. "If sanctions are lifted we would absolutely consider if we can bring value," said Mercuria CEO Marco Dunand.
Bloomberg
14-03-2025
- Business
- Bloomberg
‘Arms Race' for AI-Driven Oil Trading Is Underway, Vitol Says
The expansion of artificial intelligence capabilities will augment the already significant algorithmic trading in oil futures markets, Vitol Group Chief Executive Officer Russell Hardy said. 'There's always an arms race for that type of trading,' Hardy said at the CERAWeek by S&P Global conference in Houston on Monday.
Bloomberg
26-02-2025
- Business
- Bloomberg
Vitol CEO Says Net Zero May Be Too Costly a Target for Europe
European governments should be realistic about the costs to consumers and industry from pursuing strict net-zero emissions goals, according to the head of the world's biggest independent oil trader. Vitol Group Chief Executive Officer Russell Hardy pointed to the UK's ambitious clean power grid plan, which targets at least 95% of low carbon generation by 2030. Even 95% may be too ambitious, he said in an interview, arguing that there are trade offs to be made once all the 'cost effective and manageable' changes have been implemented.
Reuters
12-02-2025
- Business
- Reuters
European LNG prices are reaching levels that will hit demand, says Vitol CEO
NEW DELHI, Feb 12 (Reuters) - European prices of liquefied natural gas (LNG), which are currently trading at a premium to Asia, are reaching levels that will start hurting demand, the chief executive of global energy and commodities trading firm Vitol said on Wednesday. "Europe is attracting much more LNG and the European price has overtaken the Asian price now ... Typically it's the other way," Russell Hardy said at the India Energy Week conference in New Delhi. Higher European prices have drawn more LNG supplies to the region, with traders even diverting some cargoes that were on course for Asia, as countries seek to replace piped Russian gas after the Ukraine transit deal expired on Jan. 1 and amid lower temperatures. Due to this trend, Hardy said Europe will have enough gas to refill its gas inventories, but added that government intervention will be required to ensure adequate winter supplies of LNG. "We've got a very unusual situation where the gas market is backward going into summer, so the price for summer is above the price for January next year. That's just counter-intuitive to a winter-based market," he said, as Europe's winter demand is normally higher than in summer. "So you've got this imbalance, and the European Union is rightfully concerned about winter supply and keeping people warm is a major priority ... It's just a concern today that that won't happen without a degree of force being brought in to make it happen. That instruction is developing in the EU and is going to come probably with some incentives or subsidies or negatively-priced storage." Europe's gas stores are currently 48.48% full, compared with 67% at the same time last year, data from gas Infrastructure Europe showed. While global supply is "tight at the moment," Hardy added that he does not expect new policies in top producer the United States to change the global supply balance, which will see some 200 million tons of new LNG supply coming to the market between 2028-2031. "I don't think the new U.S. policies are going to dramatically change that balance out to 2030, but they may have an impact in the next decade," he said.
