Skyrocketing Natural Gas prices, who is the culprit
- 09-May-2022 4:47 PM
- Journalist: Nicholas Seifield
Houston, USA- Along with surging benchmarks futures of Natural gas, the market sentiments also rise with thin inventories among the major producers. When observed on 9th May, the price of Natural Gas surged to USD 8.12 per MMBtu. Fewer exports of Russian Natural Gas to European nations remained the critical factor for increasing benchmark affecting the gas futures among the major commodity exchanges.
Our sources in Houston confirmed that the decline in the US gas inventories, eventually narrowing the profit margins of the downstream derivative industries. The NYMEX Henry Hub June contract rebounded by 15 cents, rising to USD 8.30 per MMBtu. It can be concluded that unseasonably low temperatures across the Midwest and Northeast throughout April and in the first two weeks of May resulted in a rally in prices and a widening storage deficit.
“If the benchmark prices of crude and natural gas will increase, then the rising inflation will worsen the supply chain for its downstream market and manufacturers will have to find the alternative energy sources to fulfill the requirement from end user industry” stated a trusted source in Houston.
Talking about market dynamics in the APAC region, the market remained affected by the narrowing spread between Natural Gas and its downstream derivatives market. In India, the price of Natural gas surged to USD 8.84 per MMBtu. As we all have already been observed that the ongoing Russo-Ukrainian war has created havoc in the global energy market. If the price of Natural Gas increase further in the upcoming weeks, it will hamper the prices of all the major sectors, and the downstream manufacturers will lift the prices of Methanol and its derivatives market.
According to ChemAnalyst analysis, it is estimated that the price of Natural Gas and crude oil may further increase in the global market on the back of widening demand supply gap. Major producers of different Petrochemical units will tend to increase the prices of their products, and the final burden would have to be beard by consumers only. Exports of Natural Gas from the US to European countries will decrease due to low production rates amidst high demand from major European economies.