Gazprom PAO (ADR)(OTCMKTS:OGZPY) was a notable decliner during Monday’s trading session declining by 4% on above average volumes, which were 3 times the average turnover. The formation of lower tops and lower bottoms on the charts is indicative that bears are using rallies in the stock as a selling opportunity. Gazprom currently trades below all important moving averages. The index measuring relative strength continues to slide lower and is a cause for concern. Momentum indicators clearly suggest that bears have the upper hand at the moment. The stock currently trades near its 52-week low, which is a bearish signal.
In its latest announcement, Gazprom PAO (ADR) (OTCMKTS:OGZPY), the Russian gas producer, has said that it has asked Ukraine based Naftogaz to give an accurate account of how much volumes of gas it will purchase before the end of March.
The statement came after both Gazprom and Naftogaz concluded a meeting in Berlin, where the latter had asked for a gas price discount from it for the first quarter of 2016. Gazprom’s CEO said that in view of Naftogaz’s tough financial position, it is highly unlikely that the gas supplies will resume before the year end. Moreover, Gazprom said that it does not expect prepayment from Naftogaz.
Apart from this, Gazprom PAO (ADR) (OTCMKTS:OGZPY) has recently agreed to purchase nearly all the liquefied natural gas from the Perenco export plant located in Cameroon. It is to be noted that Perenco export plant is developed by Golar LNG (NASDAQ:GLNG) and is likely to swing into operations by 2017.
Agreement to purchase LNG
As per the announcement, Gazprom will buy close to 1.2 million metric tons of LNG per year from the project. The decision is part of the company’s effort to enhance its LNG portfolio as supply growth and fuel have started to play a key role in the global gas trade.
Meanwhile, Wells Fargo estimated that the Perenco contract will set the delivery price of natural gas at $7-$8/MMBtu. The said rate will be more than three times higher than the current U.S. natural gas prices, which are at $2.21/MMBtu.
It is being reported that Gazprom is also extending all the possible assistance to European based customers in a bid to revive its business in the region as it struggles to survive in the main market coupled with sluggish growth. Russia’s gas giant is showing interest in reviving pipeline projects in Europe and is willing to settle an EU antitrust claim, the penalty of which run into billions of dollars.
The stock price of Gazprom PAO (ADR) (OTCMKTS:OGZPY) closed 4.27% lower at $3.83 during the last trading session.