natural gas news

As energy prices soared in 2022, the gap between energy-efficient homes and those with higher energy consumption widened more than ever before. In this article, we look at three key scenarios for the cost advantage of efficient properties moving forward Source: Shutterstock   Higher energy prices have recently increased the cost advantage of energy-efficient homes, which is one of the many reasons why such properties are generally sold at above-average prices. Together with the rise in energy costs, the price differential between energy-efficient homes and those with high energy consumption has also increased. Our scenario analysis shows that the cost advantage could significantly increase if natural gas prices remain structurally high. In our high-price scenario, the expected cost savings for a terraced house of 130m² would rise to almost 34,000 euro. This is the maximum amount that homebuyers will be willing to offer for an ener

Natural Gas News - What Is The Market's Reaction To The Ongoing Russia-Ukraine Conflict?

Natural Gas News - What Is The Market's Reaction To The Ongoing Russia-Ukraine Conflict?

Alex Kuptsikevich Alex Kuptsikevich 01.04.2022 14:46
The energy sector has retreated markedly from its highs in the first days of March but remains a hot topic for markets. Europe’s gas market survived several bouts of fear that it would be without Russian gas. However, we only saw a fourfold increase in value in the first half of the month, followed by stabilisation at high, but not extreme, levels. At the beginning of the last week of March, the price was supported by a fall to EUR 1000 per thousand cubic metres compared to a peak of EUR 3400. This price dynamic clearly showed that the markets did not price for a gas disaster. The current gas payment scheme looks like a nice political compromise. Europe is paying for gas in euros and dollars (as negotiated), and Russia is getting roubles for gas (as it wanted). The net economic effect of such rearrangements is close to zero. Also, these measures are not binding for LNG exports and settlements with Japan. Besides, there is a caveat that a special commission may allow receiving currency in payment for gas. An additional calculation here is that new contracts will always include clauses about alternative payment methods, but they have little effect on the price. Nevertheless, the general upward trend in gas and oil prices is still in place. Spot gas prices in Europe are now six times higher than a year ago and two years ago in March. This does not mean a six-fold increase in prices for final consumers, as most supplies are under long-term contracts. Therefore, what we see in the Dutch TTF prices is nothing more than a struggle between speculators and small buyers in a relatively illiquid market. The NYMEX pricing is much more liquid and representative. Besides, it is pretty far from the conflict. Prices here are up 30% in one month and 130% year to date. Gas was up to $5.6 MMBtu yesterday but 14% below October’s highs near $6.5, making it hard to see market hysteria. Instead, it is just a relatively measured trend. The development of this trend has the potential to return the US gas price to October highs by the end of April due to Europe’s increased interest in non-Russian gas. At the same time, signs that Europe and Russia have managed to formalise some gas purchase terms for themselves are likely to return Dutch’s spot prices to levels near or below EUR 1000.
The Upside Bias Of Crude Oil Is Still Solid

Price Of Crude Oil (WTI) And Natural Gas (NGAS) Boosting US Dollar (USD) Which Jumps High

Alex Kuptsikevich Alex Kuptsikevich 15.04.2022 09:57
Energy prices continue to fly into the stratosphere, adding 30% since the start of April, strengthening at twice the rate of March. The last time US gas was this expensive was in October 2008. Energy, oil, and gas have a very high price elasticity Demand for American gas has surged as Europe tries to cut back on purchases from Russia as much as possible. But this also puts the current commodity sharply in short supply. Energy, oil, and gas have a very high price elasticity, meaning that a supply or demand shift of just a couple of per cent leads to a much higher price change. Thus, the US provokes soaring prices on domestic markets by providing Europe with gas. Oil also receives a strong upward marches, not only as of the closest substitute but also as another Russian export that the world is in a hurry to abandon. Oil prices managed to stay in an uptrend WTI was back above $105, and Brent closed Thursday above $110, returning to levels of two weeks ago. Oil prices managed to stay in an uptrend, albeit this time as a slider amid accelerating gas prices. The performance of oil and gas prices is supported by US export figures, which is favourable for the Dollar. Notably, in contrast to the historical correlation, energy is rising with the Dollar, although more often than not, a rising dollar pressures energy. As one of the leading energy exporters, having strengthened its position, the states will economically have the most negligible impact on the economy compared with most developed countries that are net importers of oil and gas. Fed can raise interest rates more quickly Higher energy costs may not prevent the Dollar from moving somewhat up further but may strengthen it by giving the Fed carte blanche to tighten policy more forcefully. The Fed can raise interest rates more quickly, but it can also push them to higher levels without the risk of seriously hurting the economy.
Skyrocketing Natural Gas Price (NATGAS)! Will (USOIL) Crude Oil Price Do The Same!? What An Increase!

Skyrocketing Natural Gas Price (NATGAS)! Will (USOIL) Crude Oil Price Do The Same!? What An Increase!

Alex Kuptsikevich Alex Kuptsikevich 18.04.2022 15:37
Gas prices on the NYMEX are adding for the 11th trading session of the last 12, renewing their highs since October 2008. US gas exchange prices have risen by a third since the beginning of the month and more than doubled since the beginning of the year in response to a surge in demand in Europe and rising oil prices. Companies in Europe and Asia are set to cut their purchases of Russian energy as fast as possible, pushing prices up. While the fundamentals are tilting toward later growth, technical analysis increasingly points to overbought conditions, so the likelihood of an imminent correction. In the monthly candlestick chart, the RSI is entering overbought territory (>70), which it has done only six times in the past 20 years. In all cases, prices declined sharply in the following month, or we even saw a fundamental long-term reversal. Thus, it is likely that we could see a bear attack by the end of this month. On the daily charts, the RSI has risen to 88. The last time it was higher was in 2018 briefly, which was also near price peaks. The price frenzy was also fuelled by news of falling oil and gas stocks. However, seasonality is strong in gas, and inventories reach their lowest just in the first days of April. We saw a rise last week, marking the first signs of a trend reversal. However, in the longer term, the current gas price situation lays the foundations for a new gas renaissance in the USA, and it should lead to a recovery in production rather than a price hike.
(UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun

(UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun

Rebecca Duthie Rebecca Duthie 19.04.2022 08:42
Summary: Brent Crude Oil prices are on the rise again hitting their highest prices since late March. Natural Gas Prices hitting almost 14 year high. Cotton prices increasing with crop planting is ahead of schedule. Brent Crude Oil spikes as Libya shuts its biggest oil field The market sentiment for Brent Crude Oil is bullish, reflecting the tight market supply. In an already under-supplied market, the price of Brent Crude Oil rose in reaction to Libya shutting their biggest oil field. The shutdown came in response to protests against the country's prime minister. In addition, increased tensions between Russia and The Ukraine raised concerns of the EU tightening sanctions. The price of Brent Crude Oil is expected to keep rising amidst the concerns of supply shortages world wide.   Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun   Brent Crude Oil Price Chart Natural Gas Hits Highest Price since 2008 The NGAS commodity price reached its highest since late 2008, the high prices come in reaction to abnormal weather temperatures along with the supply shortages. In addition, the NGAS inventory is currently sitting at almost 24% lower than this time last year. The mix between increasing demand and tight supply, is contributing to the rising price of the commodity. The Russia-Ukraine conflict still remains one of the main drivers for the increase in NGAS prices.   For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy?   Chart Showing the Price of NGAS Cotton July ‘22 Futures Rise as Crop is Planted The price of cotton futures bounced back in yesterday's trading market and in the past week as a result of the cotton crop being planted, the pace of planting is ahead of last year's pace and seems to be sparking investor confidence. The price of cotton is still dependent on some macroeconomic issues such as; post the COVID-19 world, whether the Russia-Ukraine war will be contained and the U.S.-China trade relations. In addition, factors such as weather will also play a part in the futures price of cotton. Cotton Futures Price Chart Sources: Finance.yahoo.com, Marketwatch.com, Tradingeconomics.com, investingnews.com Charts: Finance.yahoo.com
Risk Catalysts Will Be Crucial For The Metal Prices

Natural GAS (NGAS) and RBOB Gasoline’s (RB) May Futures Expected To Increase Further In 2022. Copper (HG) Prices Also Forecasted To Increase.

Rebecca Duthie Rebecca Duthie 28.04.2022 09:13
Summary: Natural Gas and RBOB gasoline prices are expected to increase even more throughout 2022. Increasing energy prices raise concerns around the future of clean-energy. Increasing costs of metals are driving the price of renewable energy up. Natural Gas Futures prices are expected to increase further this year. Over the past week the price of Natural Gas has dipped and then recovered. Since the market opened this morning the price of this commodity has fallen by almost 2.6%. On Wednesday the World Bank released a statement indicating that they expected energy prices to increase by a further 50% throughout 2022 before easing in 2023 and 2024. The prices of most commodities are dependent on what happens with the Russia-Ukraine conflict, which has already shocked the commodity market by altering trading patterns, production and consumption. NGAS Futures Price Chart RBOB Gasoline prices are expected to increase in 2022. Since the market opened this morning, the price of RBOB Gasoline has fallen by almost 0.7% and has seen varied prices over the past week. Since RBOB Gasoline forms part of energy commodities, the price is expected to increase according to the World Bank's forecast above. The increase in energy prices has raised concerns that the transition to clean-energy will be delayed, as many countries have announced plans to increase their production of fossil fuels. RBOB Gasoline Futures Price Chart Copper Futures prices are expected to increase in 2022. According to the article of commodity markets outlook released by the World Bank, the price of metals are expected to increase almost 20% in 2022. Should the war between Russia and the Ukraine persist, price forecasts could change even more. The price of Copper will also be affected by the changing trade patterns being more expensive, in addition the higher metal prices are pushing up the cost of renewable energy in general. However, since the market opened this morning the price of copper has fallen by 0.83%, this has been the general price trend of the commodity over the past week, perhaps a result of investor sentiment and uncertainties around China's lockdowns. Copper Futures Price Chart Sources: worldbank.org, finance.yahoo.com
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

Cotton Prices Reach Highest Prices In Almost 11 Years, Copper Prices Facing Negative Outlook and EU Announces 6 Month Plan To Phase Out Russian Crude Oil Imports.

Rebecca Duthie Rebecca Duthie 04.05.2022 12:40
Summary: The factors affecting the cotton price. The price of copper has been affected largely by the current market environment. EU to cut off Russian energy demand. Read next:Brent Crude Oil Price Continues To Dive, Silver Struggling To Hold Its Price Position & Corn Prices Soaring.  The Cotton supply is under pressure, driving prices upwards Over the past week, cotton prices have seen a surge in prices. The futures for this commodity reached their highest prices since 2011. The price surge is related mainly to adverse weather conditions, droughts in the U.S. being a major factor. The lockdown in China has not decreased demand from the U.S. to China. The demand for cotton has also been impacted by rising energy prices as the price of materials derived from oil has risen. Jul ‘22 Cotton Futures Price Chart Copper prices continue to fall amidst market conditions Copper has lost major ground on the commodity market in the past week, this comes as a result of the extended lockdowns in China, the interest rate hike announcements and a continually strengthening US Dollar. On Monday Copper closed at close to neutral for the first time since May 2020. The continuing adverse market conditions will continue to cause Copper prices to struggle. Jul ‘22 Copper Futures Price Chart Natural Gas Prices Soar The price of Natural Gas has rallied over the past week. On Wednesday the EU announced their plans to phase out importing Russian Crude Oil and other energy imports within 6 months. The Natural Gas Prices are soaring amidst fears that it will be difficult to replace the Russian supply effectively. Jun ‘22 Natural Gas Price Chart Read next: Gold (XAUUSD) Prices Fall As U.S Yields Rise, Wheat Prices Facing Pressure, Palladium Prices In Recovery! - Commodities Today.  Sources: finance.yahoo.com
Gas And Oil Prices Are Higher Too Ahead Of The EU Embargo On Russian Products

Gas Price Has Increased As The Transportation Had Been Limited Because Of The Ukrainian War, NYMEX WTI Went Below $100 Yesterday, But The End Fuel Crisis And Supply Chain Issues May Be Far From Now | ING Economics

ING Economics ING Economics 11.05.2022 15:01
Your daily roundup of commodities news and ING views Gas storage tank Energy Oil sold off with risk assets on Monday, but it failed to follow equities higher yesterday. Instead, downward pressure on the market continued, which saw NYMEX WTI settle below US$100/bbl. Growth concerns continue to weigh on commodities, and a stronger USD only adds further downward pressure to the complex. This weakness has continued in early trading this morning after the API reported that US crude oil inventories increased by 1.62MMbbls - the market was expecting a small draw. In addition, API numbers also showed an increase in refined product inventories. Gasoline and distillate fuel oil inventories increased by 823Mbbls and 662Mbbls respectively. If today’s EIA report shows similar numbers, it would be the first weekly increase for US gasoline inventories since late March and the first for distillates since early April. However, the middle distillate market is still very tight and so we would expect US heating oil cracks to remain well supported. In fact, middle distillate cracks around the world should remain well supported, given the tightness in the market and concerns over Russian gasoil exports. The EIA released its latest Short Term Energy Outlook yesterday. The report cut expectations for US oil production growth for 2022 from around 833Mbbls/d to 731Mbbls/d, which implies US oil output averaging 11.91MMbbls/d this year. However, for 2023, supply is expected to grow by 940Mbbls/d (largely unchanged from last month), which would see US output hitting a record 12.85MMbbls/d. Obviously, the biggest concern for the global oil market is around supply in the short to medium term, given the uncertainty over Russian supply. And the downward revisions to 2022 output estimates will do little to ease these concerns. European natural gas prices showed some strength yesterday. TTF rallied by more than 5%, settling close to EUR99/MWh. This strength came after Ukraine’s gas grid operator (GTSOU) declared force majeure on the transit of Russian gas through Sokhranivka, which accounts for about a third of Russian gas transited via Ukraine. GTSOU has said that it is not possible to continue operations through Sokhranivka due to Russia's military aggression in the region. GTSOU said that gas can be rerouted through Sudzha (another entry point), Gazprom has reportedly said that this is not technically possible. Dutch gas network operator, Gasunie has said that it has contracted a second FSRU (floating storage and regasification unit) for the next 5 years, which would allow it to regas LNG imports at Eemshaven in the north of Groningen. The FSRU is expected to arrive in the third quarter of this year, and along with another FSRU already contracted, would provide a total of 8bcm of regasification capacity at Eemshaven. This regasification capacity would exceed the roughly 6bcm of natural gas that the Netherlands imports from Russia every year. The big question though is if there is enough LNG supply to fully use this capacity, particularly with Germany also securing 4 FSRUs, with an annual capacity of as much as 29bcm. Some of this capacity in Germany is also expected to come into operation ahead of the next winter.   Metals Base metals continued to decline in London amid fragile market sentiment. Copper initially rallied but was unable to hold onto these gains at the close. Shanghai is going into the hardest phase of lockdowns, weighing heavily on sentiment as local authorities vow to bring the Covid wave under control at the community level by the end of this week. Meanwhile, the China Car Passenger Association (CAPM) confirmed that retail passenger vehicle sales plunged by 36% in April, its biggest monthly decline since March 2020. LME aluminium prices continue to fall and have largely ignored a steep decline in on-warrant stocks and a large number of cancelled warrants from Asia, signalling further declines. As of Tuesday, on-warrant stocks have fallen to a record low of 294kt, whilst total closing stocks dropped to 560kt - the lowest since 2005. Antaike has reported that China’s aluminium demand fell 5.5% YoY to 3.3mt last month (the biggest decline since March 2020), primarily impacted by the closure of auto producers due to Covid-related lockdowns. In contrast, the impact on Chinese supply has been rather limited so far, with operating capacity rising to 40.31mt by the end of April. As we also pointed out yesterday, Antaike also believes that the recent Covid outbreak has had a larger impact on demand than the early 2020 lockdowns. Agriculture Data from Brazil’s sugar industry group, UNICA show that sugar production in Center-South Brazil increased to 934kt over the 2nd half of April 2022 compared to only around 127kt over the first half of April as more mills started operations; although it is still significantly lower than the 1.52mt of sugar produced over the same period last season. Sugar cane crushing was down around 20% YoY to 23.8mt over the period with the sugar mix falling to 37.2% compared to 44.5% a year ago. Cumulative sugar production so far this season in CS-Brazil is down around 51% YoY to 1.1mt, reflecting a slow start to the crushing season. High energy prices continue to be supportive for ethanol production with mills allocating more cane towards biofuel supply. TagsSugar Russia-Ukraine Natural gas EIA Covid-19 China   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

XAUUSD Prices Rise As Investors Turn To Safer Assets, Cotton Prices, NGAS Prices Still Rising As Concerns Around Supply Continue

Rebecca Duthie Rebecca Duthie 24.05.2022 11:29
Summary: Gold prices rose the past week in the wake of a weakening US Dollar. Concerns around cotton supply persist. NGAS prices are still rising as concerns around supply persist Read next: Demand For Brent Crude Oil Rises, Silver Prices Rise, Improved Corn Crop Eases Supply Concerns  Gold (XAAUSD) prices on the rise The US Dollar had a softer start to the week amidst concerns around a slowing economy and the possibility of a recession. On Tuesday U.S benchmark yields rose as equities rallied. Investors seem to be seeking safer investments such as gold as the market awaits the Fed Chairs comments on key economic data, such as, PCI and first quarter GDP. Therefore, the price of gold is rising. XAUUSD Jun ‘22 Futures Price Chart Cotton futures prices Cotton prices dropped from their 11 year peak of $158 in early may. There are still concerns around supply as the droughts in Texas continue and global protected supply numbers are also falling, whilst demand is remaining stable in the post-covid world. Cotton Jul ‘22 Futures Price Chart Increased demand for NGAS is pushing up the price There is a higher international and domestic demand for Natural gas, which is driving the price of the NGAS futures up. The world is experiencing an energy shortage in the wake of Russia’s war on Ukraine. However, higher production and exports (especially in the US) should help limit the upward price momentum going forward. NGAS Jun ‘22 Futures Price Chart Read next: ECB Offering The Euro Support (EUR/USD), Strengthening Of The Renminbi Supporting The EUR and GBP, SNB Turns Hawkish (EUR/CHF) - Good Morning Fore  Sources: finance.yahoo.com, tradingeconomics.com
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

Gold Prices Struggle To Hold Monday’s Gains, Concerns Around NGAS Supplies Are Easing, Cotton - A Recession Sensitive Commodity

Rebecca Duthie Rebecca Duthie 28.06.2022 13:18
Summary: UK, US, Japan and Canada all ban Russian gold imports. NGAS domestic inventories are rising. Favourable weather conditions are causing more hope of solid Cotton yields in top growing regions. Read next: G7 Leaders Discussed A Price Cap On Russian Brent Crude Oil, China Eases Covid-19 Restrictions, Corn Prices Are Trading At 2 Week Lows  Gold prices trading at 2 week lows The price of gold is trading at almost 2 week lows on Tuesday, this comes in the wake of continuous elevated US treasury yields. The metal struggled to hold onto Monday’s gains that came in the wake of the UK, US, Japan and Canada all officially banning the imports of Russian gold, the move has been viewed by the markets as largely symbolic as Russia’s exports to the west have already dried up. Although gold is widely considered as a hedge against inflation and economic uncertainties, higher interest rates raise the opportunity cost of holding non-yielding bullion. Gold Aug ‘22 Futures Price Chart NGAS price recovery Natural Gas prices rose again, however they remain under pressure due to rising domestic inventories and milder temperatures which weighed on the demand for cooling. In addition, the most recent EIA report showed that US utilities injected more cubic feet of gas into underground storage than was expected. NGAS Jul ‘22 Futures Price Chart Cotton prices due to be impacted by a recession Cotton futures prices dropped to 9 month lows in the wake of growing recessionary concerns and increased prospects of a lower demand. Cotton is known to be a recession sensitive commodity, thus, cotton prices are set to be impacted by major banks’ rising interest rates in an attempt to fight inflation and the slowdown in both consumption and economic activity. In addition, favourable weather conditions are causing more hope of solid yields in top growing regions. Cotton Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Commodities: Favorable weather conditions may be gone some time soon, so energy prices may go further up

NGAS Prices See Relief, Cotton Prices Drop As Recession Fears Heighten, Gold Prices Drop As Hawkish Central Banks Continue

Rebecca Duthie Rebecca Duthie 05.07.2022 16:41
Summary: Cotton is at its lowest price since last September. Rising inventories causing Natural gas to close at its lowest level since mid-March. Gold prices falling as central banks continue with aggressive monetary policy tightening. Read next: https://www.fxmag.com/commodities/concerns-over-tight-supplies-is-driving-brent-crude-oil-prices-up-silver-prices-falling-favourable-weather-weak-demand-tight-supplies-factors-driving-corn-prices  NGAS prices dropping in the wake of rising inventories Rising inventories causing Natural gas to close at its lowest level since mid-March. The US domestic market has gained an additional 2 bcf of NGAS per day since the explosion at Freeport LNG, according to the company it is expected to return to partial operational capacity in October. During the week ended 24th June, the extra fuel gave utilities the opportunity to inject 82 bcf into underground storage, according to EIA, which beat the median estimate of 74 bcf. NGAS Aug ‘22 Futures Price Chart As major central banks continue with aggressive monetary policy tightening, Gold is falling Gold prices fell below the $1,800 mark during Tuesday's trading day in the wake of pressures from imminent interest rate hikes by major central banks and a strong US Dollar. The Federal Reserve bank confirmed market expectations for an extended monetary policy tightening path, with some policy makers even advocating for another 75bps hike in July in an attempt to lower consumer prices. Simultaneously, the European Central Bank (ECB) has also pledged to start raising interest rates in July and is expected to bring its deposit interest rate into the positive side during the third quarter. In addition, tighter financial conditions amongst major economies increased fears of a global recession, pushing investors towards the safety of the dollar and prompting a broad decline in commodity prices. Gold Aug ‘22 Futures Price Chart Cotton prices impacted by slowing economies Cotton is at its lowest price since last September in the wake of heightened fears of a recession amidst lower demand prospects. The inflation sensitive commodity is due to be negatively impacted by the slowdown of economic activity and consumption As major global central banks are raising rates to fight inflation. In addition, adding to the weighing on the prices is a better crop outlook as favorable weather conditions boosted hopes of good yields in top growing regions. Cotton Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Gas And Oil Prices Are Higher Too Ahead Of The EU Embargo On Russian Products

Energy: Natural Gas News Scares Markets, OPEC+ Meeting Takes Place Today!

ING Economics ING Economics 05.09.2022 14:59
There is plenty going on in energy markets at the moment, which should keep prices volatile . The market has largely ignored the G-7 agreeing to a Russian oil price cap, instead focus is on today’s OPEC+ meeting. In addition, supply concerns in the European natural gas market have grown once again, with Nord Stream gas flows not resuming Energy - OPEC+ likely to keep output targets unchanged G-7 nations agreed on a price cap for Russian oil at the end of last week. This is an idea that has been pushed for several months now by the US with the hope that it would offer some relief to the oil market. However, looking at the price action since the announcement (prices have moved higher), it is pretty clear that the market is not convinced that the cap will work. The idea of the cap is to allow buyers to access G-7 and EU insurance and shipping services for Russian oil, if the price is at or below the price cap. However, there are still a lot of obstacles and unknowns regarding the cap. Firstly, EU members will have to accept the proposal and changes will need to be made to the sanctions package. It could be difficult getting all member states to agree to this latest proposal. Secondly, and even if all EU members agree to the cap, G-7 nations need to ensure that buyers are willing to take part in the price cap plan to make it effective. This means that larger buyers such as China, India and Turkey would need to take part. There is no guarantee they will, particularly after Russia has said that it will not supply any country who follows the price cap. In addition, a big unknown is what price level the cap will be set at. It is pretty clear that it will need to be set above Russian production costs, otherwise there is little incentive for Russia to maintain production at current levels. Finally, monitoring and enforcing the price cap will be a significant challenge as well. While there is plenty of uncertainty over Russian flows, there is also quite a bit of uncertainty over OPEC+ output policy and what the group will decide today at its monthly meeting.  Previous comments from the Saudi energy minister suggested that the group may have to cut output due to a dislocation between the physical and paper markets. Several OPEC producers have since echoed these comments. However, we believe that OPEC+ will leave output targets unchanged for next month. It is difficult to justify cutting output when the market is trading near US$100/bbl. In addition, Russia is reportedly against cutting output as it sends the wrong signal to the market about the supply and demand picture. Furthermore, it would make more sense for OPEC+ to wait for further clarity on Iranian nuclear talks before taking any action. These talks appear to have taken a turn for the worse, with the US saying that Iran’s latest response was “not constructive’. Finally, we are likely to see further volatility in the European gas market this week. And this is after gas flows along the Nord Stream pipeline did not resume over the weekend, following maintenance. Gazprom claims that an oil leak at the Portovaya compressor station means that the Nord Stream pipeline will be fully shut down “until the operational defects in the equipment are eliminated”. Prior to last week’s maintenance, Nord Stream was operating at only 20% of capacity. The halting of flows means that Europe will lose close to 1bcm of natural gas supply per month. The market will now likely become increasingly nervous about flows via Ukraine as well as TurkStream. What is clear is that the more Russia reduces gas flows to Europe, the less leverage they have over Europe. Metals - more supply woes for aluminium While most industrial metals ended lower on Friday, LME aluminium managed to eke out a small gain due to persistent supply risks (especially from Europe and China as the power crisis lingers). As per the latest reports, Dutch aluminium smelter Aldel is going to suspend its remaining capacity due to high energy prices and a lack of government support. The smelter has an annual production capacity of 110kt for primary aluminium and 50kt for recycled aluminium. Meanwhile, there are some concerns that Yunnan province in China could see some similar power rationing to what has been seen in Sichuan province, due to lower hydro power output. Yunnan province is home to a large amount of aluminium smelting capacity, which stands at around 5.6mtpa, accounting for 12.7% of China’s total installed aluminium smelting capacity according to Shanghai Metals Market. Novelis Inc. joins the list of industrials trying to avoid exposure to Russian metal since the invasion of Ukraine. A new tender issued for 2023 supply to its European plants specifies that no metal of Russian origin would be allowed as part of any deal. Existing Novelis contracts won’t be affected by the new conditions and would allow the supply of Russian metal. The latest CFTC data shows that speculators increased their bearish bets in COMEX copper by 3,544 lots over the last reporting week, leaving them with a net short position of 8,312 lots as of last Tuesday. Moving to precious metals - speculators decreased their bullish bets in COMEX gold by 9,600, to leave them with a net long of 20,726 lots at the end of the last reporting week. Agriculture – speculative interest in corn remains high It was another week of strong buying interest from speculators in CBOT corn as adverse weather in the US and parts of Europe is keeping current crops in poor condition and is weighing on supply prospects. CFTC data shows that money managers increased net longs in CBOT corn by 39,251 lots over the last week, with them holding a net long of 221,467 lots as of 30 August. The move higher was predominantly driven by fresh longs, with the gross long position increasing by 30,446 lots.  Meanwhile, the managed money net long in CBOT soybeans fell by 2,670 lots over the week to 101,801 lots last week, whilst the managed money net short in CBOT wheat declined by 3,822 lots over the week, to leave net shorts at 22,247 lots. Ukraine has increased exports of agricultural products to around 5mt in August according to Ukraine’s Ministry of Infrastructure, which has been driven by a ramping up of shipments through sea ports. Ukraine reportedly shipped around 1.7mt of product through the three ports that opened after the Russia-Ukraine deal, around 1.6mt through the Danube port, and rest by rail and road . Ukraine aims to increase exports to around 8mt in September. Read this article on THINK TagsRussian oil price cap Russia-Ukraine OPEC+ Nord Stream Gazprom Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Gazprom Threathening To Cut Gas Transits Via Ukraine

It's Said That Gazprom Could Compensate The Nord Stream 1 Shutdown By Rising Deliveries Via Ukraine

Craig Erlam Craig Erlam 05.09.2022 15:49
European stock markets are plunging at the start of the week following a day of mixed trade in Asia, with Gazprom’s announcement on Friday weighing heavily on the bloc. In the USA there is a bank holiday, Euro goes down as Nord Stream 1 is shut down A bank holiday in the US often results in relatively quiet trade everywhere else but that’s certainly not looking the case today. The decision not to restart gas flows via Nord Stream 1 after an oil leak was apparently discovered has created enormous uncertainty in Europe going into the winter. The euro slipped to a new 20-year low against the dollar in response to the shutdown. The decision conveniently came hours after the G7 agreed to an oil price cap and as countries announced they’re ahead of schedule in filling gas reserves. Many would argue it was only a matter of time until the decision was taken, with Europe having been squeezed over a number of months for one reason or another. There have been reports that Gazprom could increase deliveries via Ukraine as a result of the shutdown but it’s not clear whether this would be enough to offset the loss of Nord Stream 1. And considering Siemens has claimed that such a leak would not ordinarily affect the operation of a turbine and is easily fixed, you have to wonder whether Russia would actually take that decision. A painful winter lies ahead. A massive job for the incoming UK PM The UK will discover who its new Prime Minister will be today, with Liz Truss the standout favourite to win the run-off against Rishi Sunak. Whoever is victorious, the job facing them is enormous, with the economy facing a long recession and eye-watering inflation. Alleviating one while not exacerbating the other will be the first job for the incoming Prime Minister and it won’t be easy, to put it mildly. There’s a huge amount of pessimism around the UK at the moment, as evident by the pound, which looks on course to fall to its lowest level since 1985 against the dollar. Chinese headwinds strengthen China is also facing numerous headwinds going into the end of the year, with Covid once again creating huge uncertainty. Beijing’s commitment to its zero-Covid policy has created major challenges for the economy this year and with mass testing taking place over the weekend and lockdowns being extended in Chengdu, that’s going to persist. ​ The pressure is being felt in the yuan which fell for a sixth month in August and is continuing to fall against the dollar. That’s despite the best efforts of the PBOC which continues to set the yuan fix stronger than markets expect. To make matters worse, US President Biden is reportedly weighing up measures to limit US investment in Chinese tech firms. The US is becoming increasingly hawkish toward China and the latest move is another blow to its tech space. Major support being tested Bitcoin is continuing to show resilience around $20,000 but that’s really being put to the test as risk aversion sweeps through the markets once more. It’s down 1% so far today and trading a little below that crucial support level. A significant break at this point could be really damaging, with the following key level below here being the June lows around $17,500. Considering the outlook for risk appetite in the near term, it’s not looking good. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Risk aversion sweeps across Europe - MarketPulseMarketPulse
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

EUR/USD Has Been Harmed By The Gas News. Eurozone Prints - i.a. Services PMI And Retail Sales Didn't Meet Expectations, NFP Gave Fed The Green Light

Craig Erlam Craig Erlam 05.09.2022 16:16
The euro fell below the 0.9900 line earlier in the European session but has pared its losses. Currently, EUR/USD is trading at 0.9937, down 0.19%. Euro falls on Nord Stream 1 shutdown US  markets are closed for the Labour Day holiday. A US holiday often means a quiet day for the currency markets, but not today. Last week, investors were warily keeping an eye on the latest energy crisis development in Europe. Russian officials shut down the Nord Stream 1 pipeline on Wednesday, citing the need for three days of maintenance. Saturday came and went, and the pipeline remains closed, with Moscow now claiming an oil leak in a turbine. Germany has countered that the pipeline is fully operational, stoking fears that Russia is again weaponising energy exports to Europe. The predictable result has been renewed fears of an energy crisis, which sent the euro to a new 20-year low of 0.9876 earlier today. Germany has greatly reduced its dependence on Russian gas Even if Moscow does restore service, this episode is a reminder of Europe’s energy dependence on an unreliable Russia. Germany has greatly reduced its dependence on Russian gas, from 55% prior to Russia’s invasion of Ukraine to just 26%, but if Russia chooses to play hardball and cut off gas supplies, the result will be a full-blown energy shortage for Europe this winter. There were a host of releases out of Germany and the eurozone today, and the weak data didn’t help the euro at all. Eurozone and German Services PMIs both weakened in August with readings of 49.8 and 47.7, respectively. This points to a contraction in business activity. Eurozone Sentix Investment Confidence remains in deep freeze, and fell to -31.8, down from -25.2 and below the forecast of -27.5. Finally, eurozone retail sales declined -0.9% YoY in July, following a -3.2% reading in June (-0.7% est.)  The soft numbers point to weakness in the German and eurozone economies. The highly-anticipated US nonfarm payrolls on Friday turned out to be a whimper rather than a bang, as the economy produced a solid 315 thousand new jobs, edging above the forecast of 300 thousand. The reading will enable the Fed to continue its aggressive rate-tightening cycle as it relies on a robust US labour market. EUR/USD Technical EUR/USD is testing support at 0.9888. Below, there is support at 0.9816 There is resistance at 0.9984 and 1.0056 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro hits 20-year low on oil shutdown - MarketPulseMarketPulse
Europe Is Likely To Go Into The 2023/24 Winter With Tight Storage

Gas Skyrocketed! BP Stock Price Increased! Liz Truss Has A Lot Of Challenges Ahead

Swissquote Bank Swissquote Bank 06.09.2022 15:34
The European natural gas futures jumped 30% yesterday, the euro fell further against a broadly stronger US dollar, and crude oil climbed above the $90pb mark, as OPEC decided to cut production by 100’000 barrels per day, to the August levels, as they wanted to ‘stabilize’ oil prices after the longest price decline since the beginning of the pandemic. For now, the barrel of US crude couldn’t clear the $90 resistance, as the US-Iran nuclear deal is still a possibility to boost supply, and no one really knows what could happen in the complex politics of the oil market. Also, the recession worries weigh on the demand outlook. The New PM Of United Kingdom - Liz Truss In the UK, Liz Truss won the PM race. Cable first fell to a fresh low, on the back of a broadly stronger US dollar, but the pair rebounded. The Reserve Bank of Australia (RBA) raised its policy rate by 50bp as expected today. China boosted stimulus.  The US is back from Labor Day holiday. US futures are in the positive, but winds could rapidly change direction. Watch the full episode to find out more! 0:00 Intro 0:30 Crude oil gains after OPEC cuts output, but gains remain limited 2:21 France joins Germany and UK in backing windfall taxes on energy companies 3:56 Pound digests Liz Truss victory 6:32 RBA lifts rates by 50bp, as China boosts stimulus 7:31 Is Chinese property crisis a risk for global financial markets? 9:44 What to watch today? Ipek Ozkardeskaya   Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #OPEC #Europe #energy #crisis #crude #oil #USD #EUR #GBP #inflation #UK #PM #election #Liz #Truss #RBA #AUD #rate #hike #China #stimulus #property #crisis #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Gazprom Threathening To Cut Gas Transits Via Ukraine

Gas Flows Are Stopped, Siemens Doesn't Confirm The Issue Needs It, Europe Is Getting Ready

Mark Goichmann Mark Goichmann 06.09.2022 16:26
This week looks rather paradoxical  for the European gas market as it started with October Dutch TTF Gas futures prices surging to €245.92 per MWh from €214.67 per MWh at Friday’s close. This jump was expected as Russia’s Gazprom warned it would not resume gas deliveries via its Nord Stream 1 pipeline after the completion of three days of on-site technical maintenance on the pipe. The only turbine that was under maintenance from September 1 until September 3 was stopped due to oil leaks and is expected to be returned to German Siemens energy, a maintenance contractor. Dmitry Peskov Accuses Sanctions Of Gas Flows Stoppage On this news gas prices surged with a gap on Monday. Russia’s president spokesman Dmirty Peskov blamed European sanctions that are supported by the United Kingdom and Canada for the lack of Russian gas supplies. And that is where the price paradox comes in as gas prices failed to reach a previous all-time high at €346.52 per MWh that was last seen at the end of August when Gazprom first announced the three-day maintenance works that would be conducted on the only turbine that pumps gas via Nord Stream 1. Siemens Says The Turbine's Issue Is Not Preventing It From Normal Operating Now the European gas market looks very different and, on September 6 Dutch TTF October Futures prices dropped below €217 per MWh, although they slightly recovered during midday on Tuesday. And these paradox price movements could be considered rather expected as Gazprom has lost its status as a reliable gas supplier as it is interrupting its gas flow.. Siemens Energy said that oil leaks do not affect normal pipeline operations and they could be taken care of on-site without much fuss. “Such leaks do not normally affect the operation of a turbine and can be sealed on site," Siemens Energy said in a statement. The company said it is prepared to conduct on-site maintenance once it has been asked to do so.    Read next: Interest rates hiked. The most important indicators continue their downward trend| FXMAG.COM   Europe Is Gearing Up So, it is clear that the Europeans were ready for such a situation to occur. Even a long-term complete shutdown of the Nord Stream 1 pipeline for any “technical” reasons would hardly contribute further to the negative impression that Gazprom has now created for itself as an unreliable supplier. Such a global shift in the attitude towards Gazprom has pushed the EU to push measures into motion which will diminish the dependency the union has on Russian pipeline gas supplies. A New Liquefied natural gas (LNG) terminal is emerging in EU ports as Europe increases LNG imports. Russian LNG supplies are growing too, as they are being resold by China. New interconnection pipelines between EU nations are being set into operation. Nuclear plants and coal power stations are being put back into operation. Steps towards green energy transformation are also accelerating while some austerity energy savings measures in EU nation that suggest a decrease in energy consumption up to 15% are close to be implemented.  Meanwhile, the EU has filled up its gas storages up to 80% of its maximum capacity ahead of schedule. All these measures have capped gas prices and may continue to limit them to €190-240 per MWh this week.   Disclaimer: Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.
Gas prices lose rocket propeller as weather conditions let us think of a delayed consumption

You May Not Know That Sweden Is Also Affected By Energy Concerns

ING Economics ING Economics 08.09.2022 15:44
Despite a hawkish Riksbank, SEK may struggle to recover before next year. Europe’s energy crisis is impacting Sweden both directly and indirectly, while global risk sentiment remains unstable. Riksbank’s FX reserve build-up may also get in the way of a near-term recovery. This week’s general election shouldn't have much impact on the currency Source: Shutterstock Sweden isn't immune from Europe's energy crisis Sweden is far from immune from Europe’s energy crisis and rising recession risk. That’s perhaps a little surprising, given Sweden uses little-to-no gas in its power system and uses relatively little for domestic heating either. Instead, the country relies predominantly on hydro (in the north of the country) and nuclear power (in the south). And in the case of the former, reservoir levels are fuller than usual for this time of year, despite drought conditions in much of Europe. That typically bodes well for keeping power prices in check. But the reality is the energy system isn’t balanced. Hydro-rich Luleå in the north, one of Sweden’s four electricity bidding zones, has typically paid less than 30 EUR/MWh for power in recent months. However, in the much more populous south, which saw nuclear power plant closures last year, prices have topped 300 EUR/MWh in recent days. The reality is that the electricity grid in southern regions is often reliant on imported power, which in some cases comes from gas-powered generation. It’s these areas that account for the vast majority of Sweden’s power usage, and these prices have often proven closely comparable to Germany and other European countries. Sweden's electricity prices vary dramatically across the country Source: Macrobond, ING   The bottom line is that Sweden is just as exposed as many of its neighbours to energy price spikes this winter. And that means that, like the eurozone, Sweden is likely heading for a recession – even if it's a mild one. Consumer confidence has hit all-time lows, and real consumer spending has begun to inch lower. A contraction in house prices is also underway, where the sharp rise in mortgage rates is affecting the 40-50% of customers on a floating rate. Riksbank should remain hawkish For the time being, this isn’t getting in the way of aggressive Riksbank tightening. The jobs market is exceptionally tight right now, and that’s very important ahead of multi-year wage negotiations due to conclude in coming months. Almost 90% of Swedish employees are covered by collective bargaining, and inflation expectations among both employer/employee organisations have spiked. An agreement that locks in faster wage rises over the next three years, compared to the last set of negotiations that took place in the midst of the pandemic, is likely and is at the heart of the Riksbank’s argument for hiking rates. We expect a 75bp rate hike at the September meeting, which partly reflects a need to front-load hikes, but is also because the Riksbank has fewer scheduled meetings than many of its counterparts. It has to make each meeting count. SEK recovery delayed as European growth worries mount Despite the central bank’s hawkish pivot this year, the krona has been the worst performing G10 currency (-15% vs USD) after the Japanese yen since the start of the year. The reasons are well known: the Ukraine conflict, the equity sell-off, and an ever-worsening outlook for Europe on the back of high energy prices and inflation. We had held a relatively sanguine approach on pro-cyclical currencies like SEK for most of the year, assuming a rather optimistic base-line scenario for the global economy and risk sentiment. Recent developments have convinced us that what appeared to be short-term woes before the summer are now more serious and long-lasting concerns, especially when it comes to Europe’s recession risks. The implications for SEK are big. With our economics team now expecting a eurozone recession around the turn of the year and flagging a very elevated risk of the gas supply crisis extending into the next year, SEK’s role as a proxy trade for European sentiment as a whole is set to limit its ability to stage a major recovery.   In our view, this story will prevent EUR/USD from climbing back to 1.05 before early next year, and given SEK’s high sensitivity to Europe’s growth outlook, we forecast EUR/SEK at 10.60 in 4Q22. In the coming weeks, the balance of risks remains tilted to the upside, and a further deterioration in risk sentiment could prompt a re-test of July’s recent high (10.78) and potentially March’s highs (10.86). In 2023, some improvement in the eurozone’s story and the end of global tightening cycles should help pro-cyclical currencies, including SEK, to re-appreciate. A calmer market environment may also revamp the search for carry and allow SEK to benefit from its relatively more attractive rate profile compared to EUR. As shown in the chart below, the 2-year EUR-SEK swap rate differential (which mirrors the ECB-Riksbank policy divergence) is the widest in favour of SEK in nearly a decade. We expect a gradual return to 10.00 over the course of 2023, although geopolitical and energy-related developments do pose non-negligible risks to this profile. Policy divergence points at weaker EUR/SEK Source: Refinitiv, ING Riksbank adding pressure on SEK with reserve build-up While the likes of the ECB and Bank of England are vocally protesting against their weak domestic currencies, the Riksbank’s acceleration in FX reserves build-up since February (from SEK 5.5bn to SEK 11.6bn per month) may well have exacerbated SEK weakness. Even more crucially, it does send a counterintuitive signal to markets as a weak currency neutralises the anti-inflationary effects of monetary tightening. However, Riksbank’s Deputy Governor Martin Floden recently ruled out any tweak to FX purchases as – he said - reserve management is independent from monetary policy.  Assessing the effective impact of the Riksbank’s FX purchases on SEK is quite hard, especially in a period of elevated FX volatility. Since the end of 1Q22, the Riksbank’s foreign currency reserves have risen by SEK 88bn, and if the reserve composition has remained the same as of April 2022 (chart below), and we exclude valuation effects, the Riksbank would have sold around SEK 55bn versus USD and SEK 18bn versus EUR in five months. We think the ongoing FX build-up could help keep a cap on SEK in the near term, but we doubt that would be able to counter any strong macro-driven recovery in 2023. Riksbank has accelerated FX reserves accumulation Source: Riksbank, ING Election unlikely to have material impact on currency Sweden goes to the polls on Sunday, and it’s looking highly uncertain. The incumbent Social Democrats are polling at roughly the same level as in 2018 at roughly 30%. But broken down by the two potential broad coalitions or groupings, it’s virtually neck-and-neck. Having said that, the impact on the broader financial market is less clear. Economic issues haven’t dominated the campaign, and perhaps surprisingly it’s crime and the country’s migration policy, that has instead been the central focus. And while the election has the potential to deliver a more right-leaning government, Sweden is among the most favourable towards the EU among member states, according to Pew Research. A tight election race Source: Various polls, ING Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Less Precipitation Make Aluminium Smelters In Yunnan (China) Change Its Operating Rate

Commodities: Metals Boosted, It's Time To Talk Energy Crisis In The EU

ING Economics ING Economics 09.09.2022 15:08
Metals have received somewhat of a boost, with supply risks growing and some optimism in Chinese construction. For energy markets, all attention will be on EU energy crisis talks today Source: Shutterstock Energy - EU energy crisis talks today The oil market yesterday managed to recoup some of its declines from earlier in the week. ICE Brent continues to trade below US$90/bbl and the market will be watching for any signs from OPEC+ of possible intervention. The partial recovery in the market comes despite fairly bearish EIA numbers. The EIA reported that US commercial crude oil inventories increased by 8.85MMbbls over the last week - the largest increase seen since April. When you factor in the SPR release, total US crude oil inventories increased by a more modest 1.32MMbbls. An increase in crude imports, lower exports and lower refinery utilization (due to the BP Whiting outage) over the week all contributed to the crude build. Despite lower refinery activity, gasoline and distillate fuel oil stocks increased by 333Mbbls and 95Mbbls respectively. European gas prices continue to trade in a volatile manner, with TTF breaking below EUR200/MWh at one stage yesterday, only to finish the day above EUR220/MWh. The market will be sensitive to developments today, given that EU ministers will be meeting to go through proposals to tackle the energy crisis. These proposals include various forms of a price cap, along with potentially mandatory demand cuts not just for gas but also the power market. Liquidity measures for European power companies will also be pretty high on the priority list. As we have mentioned before - while price caps will offer some relief to consumers, it doesn’t help the market try to balance itself through demand destruction.   Metals – Escondida strike lifts copper prices LME copper prices ended the day higher, amid reports of potential mine strikes in Chile. Workers at BHP’s Escondida, the world’s largest copper mine, voted to go on a partial strike from next week over safety concerns, according to the mine’s union. The strike will result in a partial stoppage on 12 and 14 September and will be followed by an indefinite strike lasting until a deal with BHP is reached. Spread action also suggests a tightening in the prompt copper market. The LME copper cash/3m backwardation reached US$145/t (highest since November) yesterday, compared to a backwardation of US$76/t a day earlier and a contango of US$7.75/t at the start of 2H22. Vale SA raised its nickel production guidance to reach 230-245kt per year in the medium term, higher than its previous forecast of 200-220kt in May, the battery metal producer announced. In the long-term, Vale expects annual nickel production to reach over 300kt to tap into the growing demand for the metal. In ferrous metals, the most active SGX iron ore contract moved above US$100/t yesterday amid hopes of a recovery in construction activity in China. According to the latest market reports, the Chinese city of Zhengzhou will resume all stalled housing projects by 6 October, by making use of special loans, asking developers to return misappropriated funds, and encouraging some real estate firms to file for bankruptcy, according to Reuters reports. Read this article on THINK TagsOil Nickel Natural gas Energy crisis Copper Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Gas And Oil Prices Are Higher Too Ahead Of The EU Embargo On Russian Products

The EU And The UK Want To Tackle Soaring Energy Prices, Bank Of England Has To Digest UK Jobs Market Data, Bitcoin's Decent Performance Ahead Of The US Inflation Data

Craig Erlam Craig Erlam 13.09.2022 15:37
We aren’t seeing much change in Europe ahead of the open on Tuesday after a broadly positive session in Asia as China, Hong Kong and South Korea returned following the bank holiday weekend. The last few days have seen a notable improvement in market sentiment. It’s not always easy to pinpoint what’s driving such a turnaround but the fact that it’s happening in the days leading up to the US inflation report is certainly interesting. Perhaps last month’s report has given investors confidence that another faster deceleration could be on the cards for August. That may sound premature but the fact is that two consecutive reports showing a sharp deceleration combined with last month’s goldilocks jobs report will be a really encouraging sign and could trigger a broader risk rebound in the markets. It may not be enough to tip the Fed balance in favour of a more modest 50 basis point rate hike next week but it may slow the pace of tightening thereafter. The Ukrainian counteroffensive in previously Russian-controlled territories in the east and the south, most notably in Kharkiv, may also be lifting sentiment. Pressure will mount on the Kremlin and while there’s no saying what its response will be, there’s certainly more hope that momentum is moving back in favour of Ukraine. Meanwhile, Europe is putting together plans to cope with higher energy prices this winter with the UK joining others in setting a cap on energy bills. While that won’t solve the problem of supplies or generate as much demand destruction, it will protect many households and businesses that otherwise wouldn’t have been able to cope this winter and could save the UK from recession. If not, it will no doubt make it much less severe. Not what the BoE wanted to see It’s not often that you see the unemployment rate fall to the lowest in almost 50 years and aren’t overjoyed, but that will certainly be the feeling at the Bank of England right now. The decline in the rate was driven by a decline in the labour force, while employment rose by only 40,000; far less than expected. What’s more, wage growth accelerated faster than expected, hitting 5.5% including bonuses in the three months to July compared with the same period last year. Less labour market slack and faster wage growth increase the odds of a 75 basis point hike from the MPC next week, especially against the backdrop of higher core inflation expectations over the medium term as a result of the new cap on energy bills. Can it build on the recovery? Bitcoin is holding onto gains ahead of the inflation data. The recovery has been very strong until this point but it may need a favourable report in order to hold onto them. A positive inflation number could see bitcoin add to recent gains with the next major test to the upside falling around $25,500. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Nerves ahead of US inflation - MarketPulseMarketPulse
Gas prices lose rocket propeller as weather conditions let us think of a delayed consumption

Brent And WTI Crude Oil Prices Trading Near $90 And $80 Levels Respectively, Nord Stream Sabotaged

Craig Erlam Craig Erlam 28.09.2022 14:45
Oil rebound brief as gas spikes amid sabotage on Nord Stream pipelines Oil prices rebounded on Tuesday but that proved to be only a brief correction as economic doom and gloom has driven them lower again this morning. With Brent trading only a little above $80 and WTI below, you have to wonder how much more OPEC+ will tolerate and the size of output cut they may be considering next week in light of the new economic outlook and price. Read more: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM Gas prices have also been highly volatile in light of the latest developments on Nord Stream One and Two. While the latter was never likely to come online and the former unlikely as flows have been gradually reduced to zero over the course of the year, the apparent act of sabotage on both kills any hope of additional gas along those routes. The question for many is therefore what the sabotage sought to achieve, occurring around the inauguration of a pipeline that will deliver Norwegian gas to Poland. Gold slipping again on a stronger dollar Gold is falling again as yields rise and the dollar rallies once more on Wednesday. The yellow metal has been hammered by the repricing of interest rate expectations recently and is now threatening to break below $1,620, with support next appearing around $1,600. It’s now fallen more than 20% from its highs this year and could have further to go yet before we see peak inflation and rates priced into the market. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil pares gains, gold loses ground - MarketPulseMarketPulse
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex: Oh My... Euro (EUR) To US Dollar (EUR/USD) Has Decreased By Almost 5% This Month So Far...

Kenny Fisher Kenny Fisher 28.09.2022 15:02
The euro is in negative territory today, after posting six straight days of losses. EUR/USD is trading at 0.9553 in Europe, down 0.41%. Referendums, Nord Stream explosions weigh on euro September can’t end fast enough for the euro, which has declined a massive 4.8% against the dollar. Earlier today, EUR/USD fell to 0.9536, its lowest level since June 2002. With the war in Ukraine escalating and Nord Stream reporting that its pipeline was deliberately damaged, it’s hard to be optimistic about the euro’s outlook. The sham referendums in Russian-occupied Ukraine have ended and predictably, the vote to join Russia was close to 100%. Moscow is expected to declare on Friday that the territories are being annexed to the Russian Federation, sparking fears that Russia could resort to nuclear weapons to defend what it claims is Russian territory. There was a further escalation in the Ukraine war last week, as explosions at the Nord Stream 1 and 2 pipelines are suspected to have been sabotaged. Nord Stream 2 has been shelved and Nord Stream 1 has been shut down for weeks, and any faint hopes that Russia might renew gas exports through Nord Stream have been dashed. European natural gas prices have jumped in response to the news. The US dollar continues to rally, and 10-year Treasury yields pushed above 4.00% earlier today, for the first time since 2008. The markets are showing a healthy respect for Fed hawkishness, even after inflation weakened in the past two inflation reports. There is some optimism that the current rate-tightening cycle is reaching its end, with Fed member Evans stating that it will be appropriate to slow the pace of tightening at some point. For now, the US dollar has momentum, driven by an aggressive Fed and weak risk appetite. Euro To USD Technical EUR/USD is testing support at 0.9554. Next, there is support at 0.9419 There is resistance at 0.9640 and 0.9711 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD falls to new 20-year low - MarketPulseMarketPulse
Gazprom Threathening To Cut Gas Transits Via Ukraine

Kim Crammer Larsson (Saxo Bank) Comments On Dutch Gas, Henry Hub Gas And Carbon Emission

Kim Cramer Larsson Kim Cramer Larsson 18.10.2022 23:25
Dutch TTF GAs is breaking below key support at €125 in a total collapse. Henry Hub Gas eyeing Shoulder-Head-Shoulder target at $5.32.  Sideways trading Carbon Emission could break deadlock and drop further Dutch Gas is collapsing. After closing below €145 the big test was 125. Gas has now broken below that minor support right at the open this morning supporting the view that Dutch Gas prices are collapsing.  There is no strong support in Dutch Gas before around 83.75 -77.30.RSI is below 40 adding to the bearish picture.Dutch could bounce and perform a minor correction from the falling lower trendline in what looks like a steep falling wedge pattern.To reverse this bearish picture Dutch Gas needs to close above 175. Source: All Charts and data in this article Saxo Group Henry Hub Gas closed yesterday below key support at $6.30 and could be in free fall to July lows around 5.32. Henry Hub would then have reached its Shoulder-Head-Shoulder target illustrated by the two vertical arrows. To reverse this continued bearish picture Henry Hub Gas must close above 7.20.   Carbon Emission has been stepping sideways for several weeks by now. However, that might soon change. Emission prices are likely to resume down trend if it breaks below 65 followed by RSI closing back below 40. RSI is showing bearish sentiment and currently testing its lower corrective rising trendline.For Carbon Emission to reverse the downtrend a close above 71.36 is needed. Source: Technical Update - Natural Gas prices collapsing breaking key supports. Carbon Emission warming up for another sell-off | Saxo Group (home.saxo)
Gazprom Threathening To Cut Gas Transits Via Ukraine

In Europe weather conditions play in favour of filling up the inventories, but 2023 may be a greater challenge

ING Economics ING Economics 27.10.2022 19:43
Day ahead European natural gas prices have fallen by as much as 82% this month. Milder weather and the continued filling up of storage have eased immediate supply concerns. However, 2023 will be a tougher year for European gas markets, particularly over the 2023/24 winter Milder weather in Europe is easing immediate supply concerns Prompt natural gas prices collapse European gas prices are collapsing as we head into the winter season. TTF day-ahead prices have fallen as much as 91% from their peak in August, trading to their lowest levels since June 2021. TTF next-hour prices fell briefly into negative territory recently, reflecting a very well-supplied spot market. Weaker prices will come as a relief to consumers and politicians in the EU. Milder than usual weather for this time of year has meant that heating demand has been lower, whilst also allowing EU gas storage to continue to fill up. According to data from Gas Infrastructure Europe, EU gas storage is now more than 94% full. Not only is this above the five-year average, but it is also well above the EU’s initial target of having storage at 80% full by 1 November this year. Meanwhile, German storage is almost 98% full. While the weakness in prices provides some relief to consumers, a concern is whether lower prices will stimulate demand once again. European fertiliser producers have already started to bring back curtailed capacity, following the recent weakness in prices. If we see this happening on a larger scale, clearly Europe’s efforts to refill storage next year will be more difficult. There are still concerns for Europe over the longer term, particularly through 2023 and into 2024. The front end of the TTF forward curve is in significant contango with Feb-23 TTF futures trading in excess of EUR140/MWh (vs. day-ahead at between EUR40-45/MWh). The forward curve through 2023 until early 2024 remains fairly flat at these elevated levels. EU gas storage % full Source: GIE, ING Research Russian annual gas flows will be significantly lower in 2023 A significant increase in liquefied natural gas (LNG) flows and demand destruction (due to the high price environment) has ensured that the EU has built inventories at a good pace this year and also allowed the region to exceed initial targets. This has come at a time when Russian pipeline gas flows have fallen significantly. The latest data shows that year-to-date pipeline flows from Russia to Europe have fallen by around 50% year-to-year to roughly 58bcm. And, obviously, these flows have declined progressively as we have moved through the year with reduced flows via Ukraine and Nord Stream. Daily Russian gas flows to the EU are down around 80% YoY at the moment. So, if we assume no change in Russian volumes from the current environment (via Ukraine and TurkStream only), annual Russian pipeline gas to the EU could fall by a further 60% YoY to around 23bcm in 2023. And clearly, there is a very real risk that the remaining flows via Ukraine and TurkStream are halted. Russian pipeline flows to the EU (bcm) Source: ENTSO-G, European Commission, ING Research Not enough LNG to fill the shortfall The LNG market has helped Europe significantly this year. LNG imports in August made up 41% of total EU imports, a significant increase from 19% in August last year. However, there are constraints to how much more LNG Europe can import. There are reports that LNG carriers are queuing waiting for spots at regasification units. This highlights the lack of regas capacity in Europe at the moment. Although this queue of LNG carriers could also be partly due to market players wanting to take advantage of the significant contango in the front end of the TTF curve. The EU has seen the start-up of a fair amount of regasification capacity in the form of floating storage regasification units (FSRUs) over 2H22. The Netherlands, Germany, Finland/Estonia have or are in the process of starting up operations at these FSRUs with a combined capacity in the region of 23-27bcm. Whilst Germany is expected to bring a further 15bcm of regas capacity online early next year. This will help with some of the infrastructure constraints Europe is facing, but the issue is also around global LNG supply and the limited capacity which is expected to start up next year. Global LNG export capacity was set to grow by around 19bcm in 2023, driven by the US, Russia and Mauritania. However, following Russia’s invasion of Ukraine and the sanctions which have followed, it is likely that the start-up of Russian capacity will likely be delayed. The Russian capacity makes up for 46% of the total new capacity expected next year. Therefore, we could see just 10.5bcm of new supply capacity. The other issue for the EU is competition for LNG. This year, weak Chinese LNG demand has been a blessing for Europe. LNG imports from the world’s largest buyer were down 21% YoY over the first nine months of the year. This would have been due to the higher price environment as well as the demand impact from Covid-related lockdowns throughout the year. However, if we see a recovery in Chinese demand next year, Europe will have to compete more aggressively for supply. 2023 will be tight for Europe The pace of inventory builds during the 2023 injection season will be much more modest compared to what we have seen this year, given the reductions in Russian supply. The ability of the EU to turn completely to other sources is just not possible. Therefore, Europe is likely to go into the 2023/24 winter with tight storage, which will leave the region vulnerable next winter.   In order to get through the 2023/24 winter comfortably, we will have to see continued demand destruction. This will have to be either a result of market forces (prices needing to trade higher to reduce demand) or EU-mandated demand cuts (the 15% voluntary demand cut at the moment ends in March 2023). While Europe should be able to scrape through the 2023/24 winter if current Russian gas flows continue, it is much more challenging if remaining Russian gas flows come to a full stop. Therefore, we believe that there is an upside to current 2023 forward values, particularly those towards the end of 2023. Although much will depend on how much storage the EU drawdowns this winter, which obviously will depend on heating demand through the peak of winter. What could see prices trade lower over 2023? Firstly, if the mild weather we are currently seeing across large parts of Europe continues further into this winter, it would take some pressure off the market for next year. This could see Europe starting the injection season with already seasonally high storage. Secondly, a pick-up in Russian gas flows. However, in the current climate it is difficult to see this. Even if there was a will amongst parties to restore flows, operationally this would be difficult at least through Nord Stream, given the damage following the sabotage. Finally, government intervention is a risk. Although, in a market which is in structurally short supply, intervention will have limited success, in the absence of mandated demand cuts. Gas price caps which continue to be discussed will do little to help resolve the tightness in the European market, if anything they could add further tightness. Read this article on THINK TagsRussia-Ukraine Natural gas LNG European gas Energy crisis Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Gas prices lose rocket propeller as weather conditions let us think of a delayed consumption

Gas prices lose rocket propeller as weather conditions let us think of a delayed consumption

ING Economics ING Economics 08.11.2022 15:02
The bulk of the complex came under pressure yesterday after Chinese health officials reaffirmed their zero-Covid policy. Meanwhile, milder than usual weather in Europe is set to continue for at least another week, which will delay the start of the heating season and provide further relief when it comes to spot gas prices Gas storage tank Energy - EU price cap on imported gas looking less likely Oil prices corrected lower yesterday after health officials from China made it clear that China will continue with its zero-Covid policy. Oil prices and the broader commodities complex have seen increased volatility in recent days after speculation that China could look to ease its strict Covid policy. The Chinese demand outlook is important for the global market. Global oil demand is expected to grow by around 1.7MMbbls/d next year and China is expected to make up almost 50% of this growth. There is plenty of uncertainty around how the domestic Covid situation develops and how authorities tackle any further outbreaks through 2023. Demand uncertainty for next year is not isolated to China. The deteriorating macro backdrop raises concerns over global growth. While 1.7MMbbls/d of demand growth might appear strong, it is important to remember that global oil demand is still trying to get back to pre-Covid levels.   The latest data from India’s Petroleum Planning & Analysis Cell shows that domestic oil products demand grew by 3.4% YoY to total 18.37mt in October - the highest monthly number since June. Gasoline consumption grew by 8.8% YoY to 2.99mt, whilst diesel consumption increased by 5.5% YoY to 6.98mt. Cumulative products demand in the current fiscal year (starting April) stands at 126.12mt, up 11.8% YoY. As for the European gas market, it appears that milder than usual weather will continue over the next week, offering relief to the region with it delaying the start of the heating season. EU gas storage continues to tick higher with it more than 95% full, whilst in Germany storage is effectively full, standing at more than 99.5%. The contango at the front end of the TTF curve remains wide. Day ahead prices are trading at a little over EUR65/MWh, whilst Feb-23 prices are trading in excess of EUR120/MWh. While milder weather has helped the European market for the upcoming heating season, there are still serious supply concerns for next year. According to Bloomberg, the European Commission held further discussions with member countries on Monday related to the ongoing energy crisis. According to the report, the Commission appears to  be against pushing ahead with a price cap on imports of natural gas. Capping the price on gas imports is a risky move with it potentially leading to reduced gas flows to the region. LNG suppliers could redirect flows to markets which are trading above the EU’s price cap. Metals – Copper imports in China remain weak amid softening demand Copper traded lower on Monday amid poor trade numbers from China and after the government reaffirmed its zero-Covid policy stance, dampening hopes for any relaxation in the world’s biggest consumer of industrial metals. China released it preliminary trade data for metals yesterday. Total monthly shipments for unwrought copper fell 20.7% MoM and 1.5% YoY to 404kt in October. On a year-to-date basis, unwrought imports were still up 8.8% YoY to total 4.82mt in the first ten months of the year. Imports of copper concentrate declined 17.7% MoM, although still up 3.8% YoY to 1.87mt in October. Cumulatively, imports rose 8.4% YoY to 20.8mt over the first ten months of the year. Iron ore imports declined 4.7% MoM to 95mt last month, while cumulative imports so far this year totaled 917mt, down 1.7% YoY. The latest data from LME shows that, on-warrant copper stocks rose by 2.95kt (biggest daily increase in a month) taking the total to 45.5kt as of yesterday. Meanwhile, total exchange inventories declined for an eleventh straight session, falling 4.05kt to 84.55kt. Agriculture – China's soybean imports decline to the lowest in eight years Trade data from China Customs shows that soybean imports in October fell 46% MoM and 19% YoY to 4.14mt (lowest since October 2014), due to weak crush margins and drought delaying US shipments. Cumulatively, soybean imports have declined 7.4% YoY to 73.2mt over the first ten months of the year. While Chinese soybean crush margins were in negative territory for much of the summer months, they did move back into positive territory in September. The latest crop progress report from the USDA shows that the US winter wheat crop is now 92% planted, above last year’s level and the 5-year average of 90%. However, the condition of the crop is more of a concern. 30% of the winter wheat crop is rated good-to-excellent, which is below the 45% rated this condition at the same stage last season. Read this article on THINK TagsWheat Oil Natural gas Copper China trade Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Commodities: Favorable weather conditions may be gone some time soon, so energy prices may go further up

Commodities: Favorable weather conditions may be gone some time soon, so energy prices may go further up

Ed Moya Ed Moya 14.11.2022 22:20
Oil Crude prices softened but didn’t break as energy traders await how supplies will be disrupted when the Russian crude price cap begins early next month. ​ Today’s oil price weakness was mainly attributed to a weakening short-term demand outlook by OPEC and nervousness that the Fed could still remain aggressive with raising rates. Warmer weather across Europe has been good news for natural gas prices and that has removed some of the extra demand that was expected to come crude oil’s way. ​ The warm weather however is about to go away and that could keep energy prices rising going forward. ​ ​ ​ Gold Gold’s rally appears to be running out of steam. ​ The Fed remains the key driver for gold prices and this week could see a strong round of hawkish pushback from the policymakers. The Fed’s Waller kicked off the week with some hawkish talk that reminded traders we need to see a couple of more strong drops with inflation to say policymakers can pause. ​ Gold appears to have strong resistance at the $1800 level, with decent support at the $1750 region. ​ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil weakens, gold rally losing steam - MarketPulseMarketPulse
The Trend In Prices Of The Natural Gas Remains Unchanged

Natural gas is the third most important energy resource in the world – XTB’s report

XTB Team XTB Team 23.11.2022 13:47
Introduction Natural gas is the third most important energy resource in the world. For years, the gas market has been dependent on long-term supply contracts, which is why gas prices have been relatively stable. Everything has changed by increasing the supply of liquefied LNG gas. Russia is one of the largest players in the global gas market, using its resources as an economic and political weapon against European countries. The pandemic, the desire to further cut emissions and the war in Ukraine have made gas one of the key instruments on global financial markets. In this report, we will show what is responsible for the massive increase in gas prices in Europe and the US, and what the future of the natural gas market may look like. Why is the topic of gas popular? Gas is considered the least emitting fossil fuel in the world. What's more, unlike coal or nuclear power plants, gas-fired power plants can be turned on and off very quickly, which allows for great flexibility in building the energy mix in individual countries. That is why gas power plants became very popular in Europe and in the United States when coal power plants began to be abandoned. At the same time, gas is the most popular raw material for heating houses. The topic of gas is currently very popular - mainly due to Russia's aggression against Ukraine and the ongoing war. Due to the fact that European countries were heavily dependent on Russian gas supplies, gas prices immediately "shot up" because supporting Ukraine in this conflict could end up "turning off the tap", which eventually happened anyway. Read next: Wealthy clients are withdrawing assets from Credit Suisse accounts| FXMAG.COM However, the beginning of this situation took place much earlier. Germany's decision to build the Nord gas pipeline Stream has led to a significant drop in gas production across the European Union. Production has been reduced by up to half compared to the peak levels before the financial crisis of 2008-2009. This has led to an increase in the dependence of European Union countries on Russian gas supplies by almost 40%. Interestingly, when the EU countries reduced their production and increased gas imports from Russia, the shale revolution began in the United States, which clearly changed the energy mix in this country. Meanwhile, Germany, wanting to become even more dependent on Russian gas and be able to resell the raw material to other European countries, decided to build the second branch of the Nord system streaming . Even despite the annexation of Crimea by Russia in 2014, this project has not been suspended. The hard winter during the pandemic led to low stock levels The next stage of this story is the pandemic and the reduction of gas imports due to the decline in economic activity in Europe. What's more, the hard winter during the pandemic led to low stock levels. At the same time, Russia stopped selling gas on the spot market in Europe and limited the filling of its own warehouses in Germany, which was most likely a preparation for the possibility of blackmailing Europe at the time of aggression against Ukraine. Russia finally invaded Ukraine in February 2022, and although it initially honored its long-term supply contracts, at one point demanded payment for gas in rubles. Moscow suspended deliveries to countries that did not agree to these conditions (including Poland, the Netherlands, Denmark and Bulgaria), and then, citing technical problems, reduced and finally suspended deliveries also to Germany. In the fourth quarter of 2022, Russia maintains only limited supplies via the Ukrainian gas pipeline and the Turkish gas pipeline. At the end of September 2022, three gas pipelines were probably intentionally damaged The last act of the story is sabotage related to the Nord system streaming . At the end of September 2022, three gas pipelines were probably intentionally damaged, which was supposed to further destabilize the situation in the region. As a result of sabotage, 3 lines of the Nord Stream can be turned off even for several years. Heavy dependence on Russian gas and other raw materials such as oil and coal led to the fact that Europe faced the biggest energy crisis in history, associated with high prices and unavailability of raw materials. The level of gas in storage facilities in the European Union at the beginning of this year was below the average for the last five years. The specter of the crisis encouraged EU leaders to fully fill their warehouses before the winter. In the chart above, we can see the forecast of warehouse filling, assuming a complete suspension of supplies from Russia and the absence of new sources of supply and consumption in line with the five-year average. As you can see, in such a scenario, there will be no shortage of gas in Europe throughout the heating period. Source: Bloomberg, XTB
Europe Is Likely To Go Into The 2023/24 Winter With Tight Storage

With current consumption, global gas reserves - similarly to oil - are expected to last for more than 50 years

XTB Team XTB Team 24.11.2022 12:42
Global gas market What is natural gas? Natural gas is considered one of the most effective energy sources in the world. Gas is used primarily for the production of electricity, heating and in industry. It is characterized by a low degree of impact on the natural environment, as emissions from its combustion are two times lower than in the case of coal. As a result, gas has become the preferred source of energy in European Union countries that are striving to significantly reduce greenhouse gas emissions in the coming years. What's more, with current consumption, global gas reserves - similarly to oil - are expected to last for more than 50 years, which is half as much as in the case of coal. However, this relatively long period is to be devoted to further energy transformation, during which fossil fuels are to be replaced by renewable energy sources. According to the annual BP energy report, the largest gas reserves in the world are held by Russia (24.3%), Iran (17.3%), Qatar (12.5%), the USA (5.3%) and Saudi Arabia (4.2%). What else is worth knowing about natural gas? Natural gas is lighter than air! This is due to the fact that it is largely composed of methane Natural gas has no smell! In order to prevent the gas from escaping, special chemicals are added to it, which are responsible for the characteristic smell Natural gas is found in the same regions as oil. Often both of these resources are mined at the same time Natural gas used in industry is not only used as fuel for power plants, but it is also used to produce chemical products, including fertilizers Natural gas is considered the cleanest fossil fuel, but if extracted from shale, there is a risk of earthquakes and excessive water consumption in the hydraulic fracturing process The biggest producers, consumers Russia, as the owner of the largest reserves of natural gas in the world, was also the largest producer of this raw material for years. However, discoveries of large deposits in Australia, Arab countries or shale gas in the USA have led to a reshuffling of the table of the largest gas producers. Even at the beginning of this millennium, the United States was a net importer of this resource, and most of the electricity produced came from burning coal. The shale revolution that has taken place in the last dozen or so years has led to the fact that the USA has become the largest producer, consumer and one of the largest exporters of natural gas. The gradual abandonment of coal in order to reduce carbon dioxide emissions into the atmosphere has made gas the preferred raw material on the green agenda of the European Union. Europe became increasingly dependent on gas - especially Russian. Russian gas was cheap, which led to the gradual abandonment of its own production. In recent years, dependence on Russian gas has reached nearly 50% for EU countries and over 50% for the entire continent. The development of LNG technology allowed for cost reduction, which led to imports of more and more gas from Qatar, Australia and the United States. Norway is also a significant producer and exporter to European countries. This country is responsible for supplying gas primarily to Great Britain, Germany, the Netherlands and soon also to Poland. How to analyze the natural gas market? Natural gas is analyzed in a very similar way to other commodities, although there are some differences. More attention is paid to transport due to its many forms. Due to the seasonal use of natural gas, attention is also paid to weather forecasts and stock levels. What should you pay attention to when analyzing the natural gas market? Relationship between demand and supply Specificity of the local market (the gas market is not as homogeneous as the oil market) Long and short-term supply contracts Mode of transport - gas pipeline or LNG? Connection network and development of export and import terminals Relations between exporters and importers Seasonality of the market related to the weather The level of stocks in relation to seasonality Changes in stock levels relative to averages and relation to price Natural gas and LNG gas Due to its state of aggregation, natural gas cannot be transported by ships or road transport (to a large extent). Gas is transported through gas pipelines, the construction of which obviously takes years and, among other reasons, long-term contracts for supplies are signed. This is why flexibility in supply is very low, even with such an extensive gas pipeline network as in Europe. The situation is different in the case of LNG, because liquefied gas can be delivered to almost any place in the world that has access to the sea and has an import terminal or uses the so-called floating terminal. LNG is produced by strongly cooling natural gas so that it reaches a liquid state, thanks to which its size is reduced by about 600 times compared to its gaseous state. One gas, many markets Due to the fact that the gas market is not homogeneous, we distinguish a few of the most important benchmarks in the world. They are: Henry Hub in USA EU TTF (Netherlands) NBP in Great Britain JKM in Japan and South Korea European gas is mainly traded between commercial market participants with some involvement of hedge funds . This market is not available to a retail investor, as is the case with NBP or JKM gas. There is also no TTF, NBP or JKM gas ETF available. For this reason, by far the largest trading in the futures market takes place in the United States, which is also available to the individual investor. Although there are certain dependencies between all benchmarks, American natural gas is governed by its own laws, which is why global financial institutions mainly analyze the American gas markGas prices in the US, EU, UK and Asia. As you can see, gas prices in the European Union are still at the highest level, which is why it is a very competitive market for American natural gas, which is up to six times cheaper than the aforementioned European gas (excluding the costs of LNG transport). Source: Bloomberg, XTB Please note that information and research based on historical data or results do not guarantee future profits.
Analysis Of The Natural Gas Futures Markets

Gas: Volatility still remains high and colder weather over January and February could see the natural gas bulls come back into town says Luke Suddards

Luke Suddards Luke Suddards 05.12.2022 14:47
It's going to be a resillent week as they're not many crucial macroeconomic events in the schedule and investors, traders and companies are awaiting the decisions of all of major central banks in the world. Even if volatility isn't dominating today's headlines it's good to dwelve into situation on the markets as gas prices are falling in the US and EUR/USD may be on the verge of a trend reversal. As a week before, we're pleased to ask Finimize's Luke Suddards to speak his mind. Natural Gas (NATGAS) plunges, have markets got calmer at last? Gas prices are falling as storage levels remain high and temperatures have been warmer. It looks as if price wants to test the $5 level. Volatility still remains high and colder weather over January and February could see the natural gas bulls come back into town.    Read next: Investors also seem to have become less sensitive to the Ukraine War, which was a significant driver of crude in the first half of 2022 says Finimize's Luke Suddards | FXMAG.COM   Are you of the opinion that EUR/USD price movement suggests a trend reversal? Yes, in the short term it does seem as if we're seeing EURUSD reverse its downtrend and it is now above its 200-day SMA. The euro is a pro-risk currency and as long as we see equities rallying into year-end we could see EURUSD reach 1.10. The other factor to consider is expectations around the Fed. We saw the jobs data out last Friday coming in hotter than expected, particularly the wage pressures. The next major risk event for FX traders will be US inflation data out on 13 December. If that surprises to the upside then we likely see the terminal rate revised higher and a higher probability of a 75bps hike priced in for the Fed's next meeting. December is far and away the euro's best month. EURUSD has gained in 14 of the past 20 Decembers, and all of the past five. The average gain is around 1.3% with a hit rate of 70%. 
Gazprom Threathening To Cut Gas Transits Via Ukraine

The United States obtains the vast majority of gas from shale

XTB Team XTB Team 24.11.2022 15:06
Specifics of the American market The United States is essentially self-sufficient in natural gas. There are gas pipelines to Canada and Mexico, and there is mutual exchange due to the size of the entire continent and a less extensive network of connections than in the case of Europe. The United States obtains the vast majority of gas from shale, therefore, in the context of long-term prospects, the number of drilling rigs and the number of fracturing crews are being analyzed. However, gas deposits are much larger than in the case of oil, so the number of towers does not change too dynamically. The largest consumers of natural gas in the US are households and power plants. Above 1/3 of electricity in the United States is produced from gas, so when gas consumption increases dramatically, the price of the raw material can react. This is the case, for example, during summer periods when the use of air conditioning reaches peak levels. Due to the shale revolution, the United States has become an important player in the LNG market. The vast majority of gas was sent to Asia, but the war in Ukraine changed this situation and Europe became more important. This is why the correlation between European and US gas prices has increased. Seasonality and weather Gas is also the most important source of home heating, which is why its highest consumption during the year takes place in the winter. This is when gas futures prices are at their highest. On the other hand, the increased use of air-conditioning in the summer may lead to greater price anomalies on the market. How do prices on the natural gas market usually move? The first phase of growth begins in early or late spring, due to the appearance of weather forecasts for the summer season, and usually ends at the beginning or during the summer The second wave of increases begins at the end of summer or the beginning of autumn and usually lasts until the turn of October and November, i.e. at the start of the heating season What are the conclusions? Building expectations is crucial for gas prices, which is why weather forecasts play the biggest role in creating market volatility. On the other hand, later execution associated with a change in stocks causes a trend to be maintained or a correction in case of excessive expectations. We can illustrate the seasonality of gas prices on the xStation 5 platform with two indicators - the average price behavior ( seasonal trends ) and a histogram of changes in a given time range ( histogram seasonals ). The greatest seasonality in the case of gas prices can be seen in the autumn period and the related building of expectations before the heating season. Source: xStation 5 Please note that information and research based on historical data or results do not guarantee future profits. Stocks Gas stocks are by far the most important factor in gas prices. Change in stocks is the difference between production and consumption, which in turn is divided into domestic consumption and exports. Stocks must be built up before the winter period, as gas consumption in these months is greater than production capacity. Demand for gas is basically shaped mainly by the weather and does not depend much on the price. Price trends have a greater impact on production, as higher gas prices determine the willingness to invest more. Changing stocks gives us an idea of the joint behavior of supply and demand. How do we analyze inventory? Stock change and analysis if it is seasonal Inventory seasonality and analysis against previous years and long-term average Comparative stocks, ie the behavior of current stocks relative to the average and compared to prices Weekly change of gas stocks Max Average (2017-2021) Min 2022 The seasonality of inventory changes alone is key to analyzing short-term price volatility. A significant deviation from the average shows a change in fundamental factors. In addition, we see that the largest increase in inventory has place in spring and autumn. Source: EIA, XTB Gas in underground storage (billion cubic feet) Max Average 2021 2022 Inventory trend analysis against historical data is crucial in assessing price pressures. For 2022, we are seeing a strong departure from both the average and the previous year, which has driven prices to levels not seen since 2008, when the US was still one of the world's largest gas importers. Source: EIA, XTB Comparative stocks and relation to gas price Gas stocks - five-year average Natural gas (USD/ MMBTu ) As you can see, there is quite a significant relationship between the direction of changes in the level of inventories and the price of natural gas. If current inventories are lower than the five-year average (inverted left axis), we should see upward pressure on commodity prices. However, if inventories are rising relative to the five-year average, there is significant oversupply in the market and downward pressure on the price. The situation at the end of 2022 does not look extreme, but geopolitical issues keep the price close to 15-year highs. Source: Bloomberg, XTB Please note that information and research based on historical data or results do not guarantee future profits.
Oanda expect next rate hikes as Bundesbank and ECB predicts will accelerate

Nonetheless, the dollar rally looks outdated, having exhausted the fundamental drivers says FxPro Analyst

Alex Kuptsikevich Alex Kuptsikevich 06.12.2022 23:51
Not only does gas price declines in Europe, but also in the USA, but we could say it's not in favour of indices. Euro seems to be in an unclear situation and on the cryptomarket, Porsche is set to launch its NFT collection. FXMAG.COM team once again reaches out to FxPro's Alex Kuptsikevich to have a detailed look at the mentioned threads. Natural Gas (NATGAS) plunges, have markets got calmer at last? It makes sense to estimate that lower energy prices would be good for markets as it mitigates inflation risks while reviving economic growth - the best combination for markets. However, US indices rallied throughout October and November, while the US gas price first dipped from $6.9 to $5.5 by the end of October but then soared to $8, along with increased traction in risky assets by the end of November in the last two months. Over the past two weeks, the gas has returned to $5.5. Half of that time, stocks were rising, and half of that time, they were declining. Germany's DAX40 is up 22% from its lows at the start of October and has retreated 1.8% from its six-month high since early December. The rise has occurred despite the euro's strengthening, and the decline comes along with the fall in oil and gas prices. Read next: To Simplify The Organization, Pepsico Will Lay Off Thousands Of Workers At The Headquarters In The USA | FXMAG.COM Falling gas is not helping the indices right now, as the fear of falling demand due to a weakening economy is behind the decline, which is equally bad news for both stocks and commodities.    Are you of the opinion that EUR/USD price movement suggests a trend reversal? EURUSD has been rising since late September, although it has occasionally stumbled. Important technical signals of a broken trend were the strong strengthening at the upward cross of the 50-day moving average, which is a signal of capitulation for position traders. At the end of November, the EURUSD had lingered near the 200-day MA for a long time, but on November's last trading day, it crossed up this line. Strictly speaking, the EURUSD recovery fits into the Fibonacci retracement pattern, touching 61.8% of the decline from the peak in May 2021 to the bottom in September 2022. Also, 1.05 looks like a nice round where there might be another round of profit taking from the last 10-figure rally.  Read next: Turbulent times on crude oil market. Nasdaq shrank by 2%, Apple and Amazon lost more| FXMAG.COM Nonetheless, the dollar rally looks outdated, having exhausted the fundamental drivers. Europe has begun to catch up with the US regarding rate hikes, and signals from the Fed are getting softer.   Porsche has just announced their own NFTs. It's one of the most prominent brands in the world - would it mean NFT market isn't 'dead' yet and prices may bounce some time in the future?  This market is not dead, but just hibernated during this crypto winter. At some point in the future, the market will change its pessimistic attitude towards NFT. Markets are cyclical, and while we shouldn't expect a repeat or intensification of the NFT euphoria as it was in 2021, the overall capitalisation of this market could almost certainly rewrite its peaks in the next three years. Admittedly, there will be fewer random people in this market as it increasingly takes on the traditional traits of collectables markets. The only difference is that NFTs are collections of unique digital goods.
An incoming cold spell in the US has seen the cost of US gas surge 27% during the past three trading session while (...) Dutch TTF gas contracts remain below €150

An incoming cold spell in the US has seen the cost of US gas surge 27% during the past three trading session while (...) Dutch TTF gas contracts remain below €150

Ole Hansen Ole Hansen 12.12.2022 12:48
On Saturday we woke up in a cold Europe with heavy snowfall in some regions. As USA Today reports, similar weather conditions are present in across the ocean what once again raises the issue of gas prices which seemingly increased on Monday morning. Courtesy of Ole Hansen (Saxo Bank) we're able to have a detailed look at the the circumstances. Winter strikes again - the weekend turned out to be cold and snowy in Europe and the USA with more to come. What's ahead of NATGAS (which opened higher on Monday) and Dutch? Ole Hansen (Head of Commodity Strategy): The current volatility in gas prices, both up and down, and both in the US and Europe, highlights the impact of weather developments. An incoming cold spell in the US has seen the cost of US gas surge 27% during the past three trading session while in Europe the benchmark Dutch TTF gas contracts remain below €150, primarily supported by strong arrivals of LNG and a pick up in nuclear power production in France. The weather outlook points to a colder than normal winter and if realized it will keep gas prices elevated in Europe in order to attract supplies from LNG and to keep demand from consumers and industry as low as possible. Read next: Rivian Break Down Of Joint Venture Negotiations With Mercedes | Amgen Inc. Begins Action to Acquire Pharmaceutical Company Horizon Therapeutics| FXMAG.COM By this time last year gas inventories across Europe had already fallen 162 TWh from its 858 TWh peak. So far this year, the mild start to the autumn supported a strong build up in inventories, and despite the recent surge in demand, inventories has so far only seen a 79 TWh reduction from a 1068 TWh peak. This has left gas in storage, some 40% above the levels seen this time last year, so in other words plenty of gas to go around still, hence the reason why the main pain is currently being played out in the power market where volatility from wind production is causing a great deal of volatility.
Did you know that in October average gas price was 4.3 times higher than in 2019?

Did you know that in October average gas price was 4.3 times higher than in 2019?

ING Economics ING Economics 14.12.2022 22:59
As energy prices soared in 2022, the gap between energy-efficient homes and those with higher energy consumption widened more than ever before. In this article, we look at three key scenarios for the cost advantage of efficient properties moving forward Source: Shutterstock   Higher energy prices have recently increased the cost advantage of energy-efficient homes, which is one of the many reasons why such properties are generally sold at above-average prices. Together with the rise in energy costs, the price differential between energy-efficient homes and those with high energy consumption has also increased. Our scenario analysis shows that the cost advantage could significantly increase if natural gas prices remain structurally high. In our high-price scenario, the expected cost savings for a terraced house of 130m² would rise to almost 34,000 euro. This is the maximum amount that homebuyers will be willing to offer for an energy-efficient home due to lower natural gas costs. Elevated gas prices could therefore increase the price difference between efficient homes and those with high energy consumption in the longer term. The cost advantage Since the beginning of the war in Ukraine, natural gas prices have risen sharply. The consumer price of natural gas averaged around 3.26 euro per m³ in October, compared to an annual average of 0.77 euro in 2019. Higher natural gas prices increase the cost advantage of energy-efficient homes, strengthening their relative attractiveness in the housing market. This seems to be reflected in house prices, as the price gap between energy-efficient homes and homes with high energy consumption has recently widened. Price of natural gas 4.3 times as high as in 2019 Consumer price of natural gas per month (incl. taxes) in euros per m³ Source: National Statistics   Sales prices for energy-efficient housing Previous research has shown that energy-efficient homes are sold at a higher price than average compared to those with high energy consumption. The estimated price difference in these studies ranges from about 10,000 euro to over 50,000 euro. Expected savings in energy costs are a key factor here. Other reasons that home buyers are willing to pay more for energy-efficient properties include both the extra comfort of a well-insulated home and the reduced environmental impact of energy consumption. The ways in which energy prices will develop moving forward still remain very uncertain. To help provide some clarity, we have assessed their potential effect on the cost advantage of energy-efficient homes for three energy price scenarios. In all three scenarios, we calculate the net present value of the cost advantage of an energy-efficient dwelling compared to those with higher levels of energy consumption. The first step is to define what we mean by an energy-efficient home. 1 Defining an energy-efficient home We define an energy-efficient home as a well-insulated property with an A-label. The starting point is a terraced house – the most common type of dwelling in the Netherlands – of 130m². Due to the solid insulation, this house consumes relatively little heat. The average natural gas consumption of A-rated dwellings is currently estimated at 7.5 cubic metres of gas (m³) per square meter. This translates into an annual consumption of 975m³ for a terraced dwelling of 130m². How do we define an energy-efficient home? Source: ING Research   The opposite is a home with relatively high gas consumption. We define this as a poorly insulated, G-labeled property. Once again, the starting point is a terraced home of 130m². Due to the poor insulation, this dwelling consumes much more heat. The median natural gas consumption of houses with a G label is estimated to be around 12.9m³ per square meter, 65% more than a similar house with an A label. This translates to an annual consumption of 1,680m³ for a terraced home of 130m². 2 Three scenarios for energy price uncertainty Wholesale prices plus energy taxes ultimately determine household natural gas prices. In all three scenarios, we use the tax rates presented on Budget Day 2022 for energy taxes and the recently published rates for the planned energy price cap in 2023. The three scenarios in our analysis vary in both the number of years that wholesale prices remain high and the long-term average. The evolution of the conflict between Ukraine and Russia is important for short-term price developments, while in the longer term, the energy transition is a more significant factor. The more costly it is to find alternatives to natural gas, the higher energy prices will remain. For the middle scenario, we apply current market expectations (based on current forward market prices). In the low-price scenario, prices fall more quickly than expected, while in the high-price scenario, prices stay elevated for longer and remain structurally higher. If and when natural gas prices decline to previous levels is uncertain Three scenarios for the development of wholesale prices for natural gas, in 2023 prices, euro per m3 Source: National Statistics, ING Research   Even before higher energy prices increased the attractiveness of energy-efficient homes, these properties had a cost advantage. So in order to determine how this trend has actually developed, we need to use a reference scenario. This is a scenario of constant energy prices which shift around the historical long-term average over time (without the sharp rises seen over the last period). 3 Calculation of the cost advantage We calculate the cost advantage of an energy-efficient home as the net present value of the expected energy cost savings over time (in the case that home buyers choose this type of property over a dwelling with high gas consumption). We do this for all three energy price scenarios. Cost advantage increases by more than half in high price scenario In the reference scenario (with constant energy prices) the net present value of the expected energy savings of an energy-efficient dwelling is 21,800 euro. In the high price scenario, the net present value of this cost advantage increases by 55% to 33,900 euro. This shows that if energy prices remain structurally high, the cost advantage of an energy-efficient dwelling will increase significantly. Low price scenario: the cost advantage for an energy-efficient dwelling increases to around €23,000 (1,200 euro, or 5% more than in the reference scenario). Mid price scenario: the cost advantage for an energy-efficient dwelling becomes about €29,700 (7,900 euro, or 36% more than in the reference scenario). High price scenario: the cost advantage for an energy-efficient dwelling increases to over €33,900 (12,100 euro, or 55% more than in the reference scenario). Cost advantage of an energy efficient home increases by more than half in high price scenario Net present value of the cost advantage of an energy-efficient home compared to a home with relatively low natural gas consumption** Source: ING Research Other factors affecting the price premium The cost advantage is one of the major factors influencing the price premium of an energy-efficient dwelling. We mentioned earlier that the extra comfort and lower environmental impact could also explain why home buyers are willing to pay more for these properties. Additionally, not all home buyers are able to properly estimate the expected cost advantage of an energy-efficient home. Instead of applying future energy price scenarios, home buyers will tend to estimate the cost advantage of an energy-efficient home based on current energy prices. Periods with temporarily high energy prices then result in an overestimation of the cost advantage. Finally, policy also affects the price premium for energy-efficient housing. For example, higher renovation subsidies typically reduce the willingness of homebuyers to pay extra for an energy-efficient home due to the lower cost of investment in energy efficiency. Higher energy taxes and stricter minimum requirements on the energy efficiency of housing will, on the other hand, increase the relative advantage of energy-efficient homes. Read this article on THINK TagsHousing market Energy Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Natural Gas Prices Are In A Downward Trend

A significant increase in gas prices supported the quotations of companies that are both producers and distributors of gas, especially on the US market

XTB Team XTB Team 28.11.2022 01:42
Natural gas and the stock market Key sectors for gas The significantly increased volatility of gas prices is of key importance not only for retail customers due to higher energy costs, but also for investors trying to take advantage of the current geopolitical situation. The main consumer of gas in the industry is the chemical sector, which uses blue fuel as a raw material in the production process (e.g. nitrogen fertilizers) and the energy sector. In the case of Polish companies, gas prices have a particular impact on two companies that use it as a raw material in the production process. Examples of companies (PL) PGNiG PGNiG is the main gas supplier in Poland - in 2021 it was responsible for 88.7% of the domestic natural gas market. The current situation on the gas market is not clear for the PGNiG Group. Admittedly, the drastic increase in gas prices significantly increases the company's profits in the mining business, but on the other hand, there may be problems with payments by gas recipients who will not be able to bear the growing costs of their operations. The company's key customers include: Orlen, Azoty, Lotos, PGE, KGHM, ArcelorMittal and PGNiG Termika. Grupa Azoty In the case of Grupa Azoty, which uses gas to produce nitrogen fertilizers, an important risk factor discounted by the market is the risk of blue fuel rationing, which has already happened in history. Grupa Azoty is the largest recipient of this raw material in Poland, consuming 2.3 billion cubic meters per year, which accounts for over 10% of the annual consumption in Poland. It is estimated that in PuÅ‚awy, which is dependent on Grupa Azoty, the gas price may account for as much as 40% of total costs. Recently, the drastic increase in gas prices has caused a significant reduction in production. The operation of the installation for the production of nitrogen fertilisers, caprolactam and polyamide 6 was suspended. The company reduced the production of ammonia to approximately 10% of its production capacity. Ciech Ciech is another leader in the Polish chemical industry. Up to a certain point, in the case of this company, Russia's decision to turn off the gas tap in Poland had no direct impact on it, as Ciech does not use this raw material in the production process in Poland. However, it does use it in production at its German Stassfurt plant , so the general increase in gas prices raises its production costs. Russia's latest decision to cut off gas flows from Russia to Germany via Nord Stream 1 and 2 can dramatically change this situation. The main activity of the company is the sale of soda ash, however, the price of gas in annual contracts cannot be fully hedged, which would have a negative impact on the margin given the increase in the price of this raw material. Read next: Greater demand for cheap American gas generated by European countries results in lower availability of gas in the country and a slower increase in inventories| FXMAG.COM Company Examples (Global) Range Resources Range Resource Corp. engages in the exploration, development and acquisition of natural gas and oil deposits in the Appalachian and Mid-Continent regions. The company was founded in 1976 and is headquartered in Fort Worth, Texas. Southwestern Energy Southwestern Energy Co. is a holding company that explores, develops and produces natural gas, crude oil and natural gas condensate (NGL). It operates in the Exploration and Production (E&P) and Marketing segments. The E&P segment includes operations in Northeast Pennsylvania, West Virginia and Southwest Pennsylvania. Shell Shell Plc produces crude oil and natural gas. The company operates in the following segments: Integrated Gas, Mining, Petroleum Products, Chemicals and Corporate. The Integrated Gas Segment includes liquefied natural gas, conversion of natural gas into liquid fuels and other products. Cheniere Energy Cheniere Energy, Inc. conducts activities related to liquefied natural gas (LNG). It owns and operates LNG terminals and develops, builds and operates liquefaction projects near Corpus Christi, Texas and at the Sabine Pass LNG terminal. The company was founded by Charif Souki in 1996 and is based in Houston, Texas. Results of selected companies against benchmarks Performance of selected US companies with exposure to natural gas against the benchmark A significant increase in gas prices supported the quotations of companies that are both producers and distributors of gas, especially on the US market. Investing in these stocks could yield a significant return from early 2022, especially in the face of the overall decline in the US stock market. The situation is different on the Polish market, but in this case the drastic deterioration of the geopolitical situation as a result of the outbreak of war in Ukraine, the risk of energy blackmail and the general outflow of capital towards safer markets are of importance.
Greater demand for cheap American gas generated by European countries results in lower availability of gas in the country and a slower increase in inventories

Greater demand for cheap American gas generated by European countries results in lower availability of gas in the country and a slower increase in inventories

XTB Team XTB Team 28.11.2022 01:42
Import and export The shale revolution in the USA made the United States not only give up coal in favor of gas, but also became a net exporter of this raw material. In 2021, gas exports reached record levels and it was the fifth year that the US exported this commodity than it imported it. American LNG was delivered primarily to Asian countries, but the tense situation in Europe led to a change in this situation. The US also supplies gas to Canada and Mexico via pipelines. Why is it worth watching gas trading data in the United States? Greater demand for cheap American gas generated by European countries results in lower availability of gas in the country and a slower increase in inventories, which in turn leads to increasing uncertainty before the winter season. Gas prices in Europe are 7 times higher than in the USA and recently also in Asia. With the ongoing development of LNG infrastructure, the situation in the US may become even more tense and lead to a narrowing of the gap between gas prices in the US and Europe. Since 2017, the United States has been a net exporter of natural gas, mainly due to the development of the LNG industry. Source: EIA, XTB Term curve As with other commodities, the majority of trading in the natural gas market is done through futures contracts. Contracts for energy resources are divided into monthly contracts due to the different demand during the year. Due to seasonality, price differences within one year can be really big. In the case of natural gas, the highest prices are recorded in the heating period, while the lowest are observed just after the period of higher consumption. Investors must keep in mind changes to the series of contracts, i.e. rolling, because the differences in the valuation of individual series can be really large. The difference resulting from contract changes is charged using swap points . It is worth noting the so-called “ Widowmaker spread ", i.e. the difference between the March and April series of contracts (end of the heating period). It can be really big, so when trading on the natural gas market, it is important to adjust the position size and the “ take profit” and “stop loss ” levels . Natural gas forward curve The forward curve on the natural gas market is the most specific of all commodities, which results from a clear seasonality. Futures contract valuations peak mainly in the autumn months, while the largest decrease in contract prices occurs between March and April. Source: Bloomberg, XTB Please note that information and research based on historical data or results do not guarantee future profits. Positioning of speculators Participants of the futures market are not only commercial investors, i.e. producers, distributors or recipients, but also professional investors. Of course, we can divide this group even more precisely, for example, between speculators and managers, but they are usually referred to as a whole group of non-commercial investors, or colloquially - speculators. Speculative investors follow the forecasts of the price itself, i.e. they buy contracts expecting gas price increases and sell them when they expect market decreases. The difference between the number of buy and sell contracts usually shows the general sentiment in the natural gas market. The key in this case are the zones of extreme overbought and oversold, which on the xStation 5 platform are depicted by the gray areas of the COT (Commitment of Traders) indicator. Extremely high and low COT levels can indicate potential turning points in the natural gas market. Source: xStation 5 Please note that information and research based on historical data or results do not guarantee future profits. Gas price prospects in the long and short term In recent years, gas has been a relatively volatile instrument, which was related to its wide availability and the possibility of diversification. The increase in prices on the commodity market related to the pandemic and then the war between Ukraine and Russia destroyed this order. Read next: A significant increase in gas prices supported the quotations of companies that are both producers and distributors of gas, especially on the US market| FXMAG.COM The US Energy Information Agency (EIA) operating at the Department of Energy (DOE) indicates that gas prices will remain at a high level throughout the upcoming heating period, and then the base will remain at a relatively high level in relation to previous averages. Gas prices in the US will most likely tend to catch up with the European price due to the high demand for gas in Europe. Nevertheless, in the foreseeable period, we will most likely experience a similar stabilization as in previous years, although the coming quarters will most likely see the upward trend on the gas market continue. Before the pandemic, the marginal cost for LNG supplies to Europe and Asia was calculated in the range of USD 5 to USD 8 per million British thermal units ( MMBtu ), so it can be expected that between these levels there is a potential low for gas prices, while the peak will depend on how much gas Europe will want to buy. Natural gas price forecasts (USD/ MMBtu) The short-term outlook for natural gas prices in the US points to maintaining high levels during the heating season, and then falling to a higher base than before the pandemic or post-pandemic period. Source: EIA, XTB Please note that information and research based on historical data or results do not guarantee future profits.

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