Russian cold curbs gas to Europe

Russia reduced gas supplies to Europe and trimmed back its oil output because of extreme cold at home, and weather forecasters warned of another deep freeze next week. Temperatures plunged below -30 degC (-22 degF) in central Russia, occasionally dipping below -50 degC (-58 degF) in parts of oil-producing Siberia.

Russian gas monopoly Gazprom said it had cut back gas supplies to Hungary and Bosnia-Herzegovina by around 20% to deliver more to domestic users, and may also cut flows to Italy and Austria. Gazprom is the world's largest gas company and supplies one quarter of Europe's gas needs. It had already briefly reduced supplies to Europe in early January due to a contract dispute with Ukraine, a key transit country for European deliveries. Ukraine said it was partly responsible for lower Russian supplies to Europe as it was taking more gas after temperatures plunged to about minus 20-30 degrees Celsius.

The extreme cold has also slowed Russia's oil output by an average 200,000 barrels per day over the past week from the December average of around 9.65mn bpd. On Tuesday, production fell further to 9.4mn bpd with output declining at almost all major oil firms with facilities in West Siberia, including Lukoil, Rosneft, TNK-BP, Sibneft and Yukos.

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