That difference helped push US companies to invest billions into LNG export terminals, allowing them to send cheap US gas to higher-priced destinations around the world. Reason: While US natural gas might be especially cheap amid it’s latest plunge, the US market has long maintained major discounts to comparable European and Asian hub prices. Source: EIA, Bloomberg, Schneider Global Research & Analytics That threatens to send the global oil market into extreme oversupply and could create major challenges if conditions persist long-term. For now, estimates suggest Chinese crude demand is down ~3 mmbbl/d (-20%) from pre-Coronavirus levels. Enter the Coronavirus, which has resulted in major barriers to transportation and overall economic activity. In short, it’s difficult to overstate China’s importance to oil markets. In 2019, the country accounted for nearly 15% of total global demand, and roughly 67% of all new demand growth. Reason: China is the world’s fastest growing and largest importer of crude. Source: NYMEX, Schneider Global Research & Analytics If prompt breaks below 2016 levels, that would mean current prices charting 21st century lows (prompt prices haven’t traded below $1.60 since 1999). natural gas prices are near their lowest levels since 2016. With natural gas production charting record highs throughout 2019, an ongoing mild winter has combined strong supply with unusually weak seasonal demand. The February Markets Watch arrives with four charts and four explanations to illustrate key trends in Henry Hub natural gas prices, Chinese crude demand, global gas benchmark prices and European natural gas storage levels.Ĭhart #1: Henry Hub Prompt Month Natural Gas Prices Contributed By: Robbie Fraser, Commodity Analyst | Schneider Electric Energy & Sustainability Services
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