No More Foreplay: Russia Threatens European Gas Supply Disruptions

SOURCE: ZERO HEDGE

It appears Vladimir Putin is willing to hit ‘em while they’re down. Early European equity weakness (and safe-haven flows) on asset-freeze threats have accelerated as Bloomberg reports,Russian energy minister Alexander Novak threatens gas supply disruptions if the EU continues to re-export Russian gas to Ukraine. 3Y German bond yields have plunged to -4.1bps, a record low close and European stocks are closing on their lows of the day.

- *RUSSIA THREATENS GAS SUPPLY THROTTLING TO EUROPE: HANDELSBLATT

3Y yield at record (negative) lows…

As Bloomberg reports, Russia Threatens Gas Supply Throttling to Europe: Handelsblatt

EU re-exporting Russian-purchased gas to Ukraine exceeds existing treaties, Novak tells newspaper

Novak says only adherence to negotiated agreements can guarantee undisrupted gas supplies to Europe: Handelsblatt

Novak says Ukraine has rejected constructive offers from Russia on pricing, reducing Ukrainian gas debt and future pre-payments ahead of talks tomorrow in Berlin: Handelsblatt

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Who will be hurt most?

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As we discussed before, Europe is confident it can withstand a disruption as it has been storing gas ahead of the winter.

However…

European storage facilities contained a record 75.7 billion cubic meters (2.7 trillion cubic feet) of gas yesterday, making them more than 91 percent full, according to Gas Infrastructure Europe, a Brussels-based lobby group.

“If colder weather arrives, then storage levels could well be drained,” Citigroup said.

Just as we warned here…

It already appears as though the developing El Nino pattern may mean noticeably colder weather this winter…

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It appears Europe’s short-term plan to mitigate the “Winter War” may have bigger boomerang consequences than they seem to believe (and bear in mind the consequences of cold, pissed off Europeans in the past).