Middle East turmoil boosts natural gas prices
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🔵 You've Got It, Hot and Cold: The NGN25 Saga 🔵
Last Friday, gold ol' NGN25 closed with a fizz, up +2.55%, breaking its four-day losing streak. What you ask? Well, ol' NGN25 is July's natural gas, and this prices surge has everyone talking!
So, what sent NGN25 on a Friday fling? A +6% rocket ride in European natural gas sparked by Israel's military sparring with Iran. Folks are worried that ole' Iran might chuck a spanner in the works and kibosh the Strait of Hormuz, which, let me tell ya, accounts for about 20% of global LNG shipments. Not cool, huh?
To make matters less breezy, ol' Israel flipped the switch on the Leviathan gas field for security reasons, causing pipeline turbulence to Egypt. Yes, it's a soap opera, but the dramatic turn of events got nat-gas prices fired up!
🤖 Hey, Robot, What's the Scoop on the Future? 🤖
You're keen on the forecast, right? No worries, here's the lowdown. Vaisala rolled out the weather cards, hinting that most of the USA will be sweating like a pig from June 23-27, which means higher air conditioning demand and even higher pricing for ol' NGN25.
🔥 The Next Storm: Opposing Winds Ahead? 🔥
BNEF reported a 3.2% y/y increase in Lower-48 state dry gas production on Friday. Sounds swell, but keep an eye on the bigger picture. Lower gas demand, down 5.2% y/y? Time to pop the champagne yet? Not so fast, bucko! There are other factors to consider.
📉 A Summer Showdown: Natural Gas vs. Electricity 📉
Electricity fetched lower output numbers, kicking down nat-gas demand for utility use. The recent drop in US output might be a sign of things to come but again, don't jump to conclusions just yet!
📊 Baker Hughes: The Numbers Game 📊
Baker Hughes has the scoop on the current rig count. They reported a -1 drop in active US nat-gas rigs, but what does it all mean? More rigs could be a recipe for cheaper prices if demand can't keep pace, but it's all based on predictions, so let's wait and see.
🔵 Struggling for Breath: The Hazards of a Natural Gas Gasping-Grasp 🔵
Thursday's EIA report hinted that nat-gas inventories rose by +109 bcf (yeah, that's billion cubic feet), putting a dent in our NGN25 hopes. But hey, it's still summer, and we're just at the beginning of this wild ride!
[1] Sources: Reuters, CNBC, EIA, BNEF[2] Source: CME Group[3] Source: Oil Price[4] Source: IEA[5] Source: InvestorPlace
- With the escalating tension in the Middle East affecting natural gas prices, it seems that the excitement of trading in sports isn't the only thing that's heating up.
- As the global demand for natural gas fluctuates, one might ponder whether predicting sports outcomes is less of a gamble than predicting gas prices.
