Analysts explain Gazprom's increase in gas supplies to Europe

An 8.5-percent increase in gas exports of Russian gas monopolist Gazprom to 82.1 billion cubic meters over the first seven months of 2003 is due to the wish of European countries to increase gas imports before a sharp growth of gas prices and the cold winter of 2002-2003, an analytical survey of the Veles Capital Investment Company says. Analysts also believe that the rise in gas supplies abroad and on the domestic market will considerably influence Gazprom's performance this year. The dynamics of gas prices is similar to oil prices; however, they fluctuate with a certain delay of six to nine months. As oil prices hit their highs late in 2002 - early in 2003, one expects gas prices to reach their maximum annual level in the current period. However, one should also take into account that oil prices have remained high. Eventually, this year must become the most successful for Gazprom regarding its financial standing, gas export growth taken into account. Analysts recommend buying the company's shares.

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