The euro ticked higher and European equities rose modestly on a report that Russian gas flows are seen restarting on time on Thursday after the completion of scheduled maintenance. It's currently undergoing 10 days of scheduled maintenance.
Two unnamed sources cited by Reuters said the pipeline was expected to restart but at less than capacity. Last month, Gazprom cut exports by 40% citing a turbine that was stuck in Canada due to sanctions.
"They will return to levels seen before July 11," one source said.
The turbine was shipped July 17 but it may take some time to install, with other reports suggesting it could be available in the first week of August while some said the turbine was a backup and a pretext.
Earlier today European Commission official said he didn't expect it to come back online.
“We don’t expect that it comes back,” Budget Commissioner Johannes Hahn said Tuesday. “We are working on the assumption that it doesn’t return to operation. And in that case certain additional measures need to be taken.”
The modest market reaction surprises me. This is a major risk to the European economy but tapered flows are only a half-win as they will leave the continent undersupplied heading into the winter and at risk of the whims of Putin.
/eur
