Europe 'Not Well Prepared for Winter' on Energy, Goldman's Della Vigna Says

• Oil faces logistics problems, with rerouting around Africa adding 30 days and $25-30 to transportation costs, contributing to inflation in the energy complex.
• Europe is entering winter with 20% less natural gas inventories and 20% less supply, with risks to prices skewed to the upside.
• Refining capacity is tight, especially for middle distillates, due to Russian capacity being offline, which could lead to substitution with natural gas in a cold winter.
• China is strategically managing its energy needs by substituting imported hydrocarbons, boosting EV sales, and utilizing existing inventories to stabilize its market.

Michele Della Vigna from Goldman Sachs discusses the escalating costs and supply challenges in global energy markets, particularly for Europe ahead of winter. Geopolitical tensions are exacerbating logistics and production issues in oil, gas, and refined products, leading to higher prices and concerns about Europe's preparedness for potential cold weather.