The active monthly Brent oil contract is currently quoting USD 66.80/barrel. Where geopolitical turmoil is creating upward price pressure, ample supply in the oil market is counterbalancing it. The OPEC+ (V8) decision to start phasing out the next voluntary production cut of 1.65 mv/d has led to limited market reaction. This is because production quotas were increased by only 137 kv/d in October and oil inventories in China and OECD countries remain low. In addition, the cut does not translate directly into additional production and exports. However, the current series of quota increases does make future production cuts more transparent and thus more effective. Meanwhile, the price of oil does fall so low that U.S. shale oil production is coming under pressure.
The active monthly contract of the TTF gas market is currently quoting around EUR 32/MWh. The net long position of speculative investors has been sharply reduced in recent weeks. This has contributed to downward price pressure, while the price movement itself has not been predominantly downward. From the commercial side, volume hedging has contributed to upward price pressure. Upward and downward price pressure were thus roughly balanced, resulting in a relatively stable price. Gas stocks are currently in good shape at the EU level. With an average fill rate of 80%, it is still ten percentage points away from the 90% fill target between October 1 and December 1. Regionally, however, there are differences, with the Netherlands, with a filling rate of 68%, still having a long way to go to meet the EU filling target.
