Latest natural gas price surge will unwind

At the time of writing, global natural gas prices are soaring. Dramatic moves in global natural gas prices are nothing new and not even very surprising given the extreme weather over the past year or so. In this Energy Watch, we consider earlier spikes in natural gas prices and discuss whether this time is different.

In view of the wider interest, we are also sending this Energy Watch to clients of our Commodities Overview service.
Caroline Bain Chief Commodities Economist
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Energy Data Response

US Weekly Petroleum Status Report

Strong exports contributed to the first drawdown in stocks in four weeks last week, supporting already-high crude prices. What’s more, stocks at the hub of Cushing, Oklahoma, also fell and they are now down about 50% y/y. With demand looking healthy, prices are likely to remain high for a few months yet.

20 October 2021

Energy Update

Coal is back in fashion, but not for long

Coal prices are likely to remain high over the next six months as high demand weighs on already-low stocks. Prices should drop back next year, though, as demand growth moderates and supply improves.

19 October 2021

Energy Data Response

US Weekly Petroleum Status Report

A large fall in the refinery utilisation rate drove another increase in stocks last week, although utilisation rates are normal for the time of the year. And with output set to remain constrained until at least early next year, already-high crude prices should remain elevated for the next few months.

14 October 2021

More from Caroline Bain

Commodities Update

China’s power shortage curbs metal supply & demand

China’s manufacturing PMIs for September diverged, but both still point to subdued commodities demand. What’s more, the surveys were conducted before power shortages started to constrain activity. Weaker industrial activity should put downward pressure on most commodity prices but, in the case of some metals, it could also lead to lower supply. In view of the wider interest, we are also sending this Commodities Update to clients of our Metals service.

30 September 2021

Commodities Weekly Wrap

Downward pressure on prices is mounting

Commodity prices held up well this week, despite the hawkish tone of the Federal Reserve and continued worries over a messy default by Evergrande, the Chinese property developer. Notably, European natural gas and Asian LNG prices continued to climb, powered by ongoing supply disruptions and unseasonably strong demand. Oil prices also made gains amid concerns that OPEC members are struggling to hit collective production targets which, if sustained, poses an upside risk to oil prices. Looking towards next week, Chinese PMI data are scheduled for release on Thursday/Friday. We expect a continued loss of momentum in industrial activity, which would be negative for commodity prices, especially industrial metals. Investors will also be closely watching developments around Evergrande. We expect a managed restructuring of the company, which should limit the negative impact on China’s metals demand.

24 September 2021

Metals Data Response

Global Steel Production (Aug.)

Despite high prices, global steel output contracted in August. And given that the authorities in China are proactively encouraging lower output there, further falls in the coming months appear likely.

23 September 2021
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