How Can Natural Gas Price Affect Global Petrochemical Market
- 25-May-2022 2:24 PM
- Journalist: Patrick Knight
Texas, US- Strong demand for Liquefied Natural Gas (LNG) from the Europe and United States has put pressure on Asian inventories, causing prices to rise. However, Liquefied Natural Gas prices have fallen this week with lower future benchmark prices. The prices fell to attract additional buyers as the traders observed the shift to more convenient fuel for their Petrochemical market. In India, the price of Natural Gas is observed to be 8.16 per MMBtu.
“The Asian spot LNG prices dropped, but the shipping charges continued to rise with constraints on logistics and surging transportation costs." A trusted source from China confirmed the news.
In Europe, surging Natural Gas prices have accelerated the cost of electricity and various other chemicals. The global energy crunch puts pressure on Biden, and the administration struggles to tackle high inflation. Canada doesn’t have its own LNG export terminal, but surging US shipments to Europe have created a ripple effect by raising demand for Canadian Natural gas in the United States.
Henry Hub prices have slipped since early May but are still on the higher end due to constrained supply. In the US, the price of Natural Gas pushed up as the storage levels in the United States and Canada are below average, and the cost of transportation also surged. It was also heard that the drilling activities in the reservoirs were affected due to labour shortages and disrupted chain supply.
According to ChemAnalyst, the prices of Natural Gas in the global market are expected to rise ahead of the global market. The benchmark futures contract prices for Natural Gas will increase, and surging demand from downstream ventures will fluctuate the price trend. Exports from the US to European Unions (EU) are expected to increase with the increase in production rates among enterprises. The downstream derivative market, namely the Acetic acid and Acetic Anhydride markets, will also oscillate in the global market.