Negative gas prices may occur in Europe, according to top executives at major commodity market operators. The possibility of prices for short-term gas contracts turning negative this summer is being discussed, as reported by Bloomberg based on discussions at the annual E-World energy fair in Essen, Germany. The reason for potential negative prices would be an oversupply of gas not matching sluggish demand.

This scenario, where gas producers pay consumers to take their gas, is becoming more likely as prices have already approached pre-crisis levels. Recently, gas prices on the European exchange fell below $300 per thousand cubic meters for the first time in two years. During the May 26 auction, the cost of June futures on the TTF Hub in the Netherlands decreased by 0.3% to €25.38 per 1 MWh, approximately $286 per thousand cubic meters, considering the current exchange rate.

Peder Bjorland, vice president of gas trading and optimization at Norwegian oil company Equinor, mentioned that in certain regional gas markets in Europe, prices could go negative during hours or days with high renewable energy production. However, he cautioned that negative prices are still a distant possibility and many factors can influence the market.

Dyerd Varga, the CEO of Swiss trading firm MET International, also believes that the price of gas in Europe will fall below €10 per MWh (about $113 per thousand cubic meters).

“In the short term, within a few days, if the gas storage facilities are full, we could see prices below €10,” Varga stated, attributing the reason to a “bottleneck” caused by insufficient storage space.

Earlier we reported that oil prices rose after the statement by Saudi Arabia’s Energy Minister.

According to trading data, global oil prices rose by more than 1.5% on Wednesday afternoon following the comments made by the Energy Minister of Saudi Arabia.

The price of July futures for Brent oil increased by 1.54% to $78.02 per barrel, and the price of July futures for WTI oil increased by 1.69% to $74.16.

The day before, Minister Prince Abdulaziz bin Salman criticized the International Energy Agency (IEA) for frequently making incorrect forecasts about the hydrocarbon market. Bin Salman also issued a warning to speculators in the oil market ahead of the OPEC+ meeting, stating, “I would just tell them to be careful.”

Representatives of OPEC+ member countries will meet on June 4 in Vienna to decide on their next steps.

According to Stephen Brennock, an analyst at PVM Oil Associates Ltd, cited by Bloomberg, the markets are evaluating the statements made by the Saudi energy minister.

Earlier we reported a decline in the number of oil rigs in the U.S.

During the reporting week, the number of active oil rigs in the U.S. decreased by 11, marking the largest weekly decline since September 2021. This information was provided by the oil services company, Baker Hughes, on Friday.

The decline in oil prices is influenced by the U.S. government debt situation.

In addition, the number of active gas drilling rigs also experienced a significant decrease of 17 units during the previous week, the most significant weekly decline since June 2020.

The cumulative number of active oil and gas rigs dropped by 11 units to a total of 720 during the week of May 13-19, which is the lowest level seen since May 2022.

According to Baker Hughes, this figure represents an 8-unit decline or a 1% decrease compared to the same period last year. It is the first decline of this kind since April 2021.

Specifically, the number of active oil rigs in the U.S. decreased by 11 units to 575, reaching its lowest point since June 2022. Meanwhile, the number of gas rigs remained unchanged at 141 units.

The most substantial decline occurred in Texas, where the total number of rigs fell by 9 units to reach 355 units during the reporting week, reaching the lowest level seen since May 2022.

In the Eagle Ford field, the number of rigs decreased by 3 units to 59, which is the lowest level observed since April 2022. Similarly, the Permian Basin experienced a decline of 4 units, reaching its lowest point since March, with a total of 349 units.

On a positive note, the rig count in New Mexico increased by 1 unit to 109, which is the highest level recorded since February.

Earlier we reported that oil prices were preparing to show their first weekly rise in a month.