Natural Gas Prices Drop Sharply Amid Russian Refinery Attacks
Natural gas is down while crude oil is up after Russian refinery attacks and oversupply issues move the market.
The price of natural gas fell 3.97% on Wednesday as Ukraine’s drones hit oil refineries in Russia.
This attempt to eliminate some of Russia’s resources to be used in the war on Ukraine resulted in fire breaking out at a refinery in the Russian city Samara, formerly known as Kuibyshev. One of the refineries in the area was completely knocked out of commission.
From the beginning of the year. Ukraine has been launching attacks on Russia’s energy sector in attempts to get the larger country to pull out of Ukraine.
As a result of the latest attacks, crude oil futures increased. Somehow, natural gas prices dropped dramatically, but that could be due to oversupply issues that are continuing to bother the industry.
Russia has been demanding that companies decrease their oil output in 2024 to meet their commitment to OPEC+. Russia’s target for OPEC+ is to cut production by 2.2 million barrels by the time the second quarter is finished. That may prove more difficult than they anticipated as they continue to battle with Ukraine over disputed territory. However, Russia is being supplied oil by China and other partner countries in Asia.
Inflation Fears Hurt Pricing
As the bad inflation news continues, natural gas prices might continue to stay down, especially until demand increases as the weather cools down later on in the year. Poor inflation numbers released earlier this month have kept investors from stocking up on natural gas more than usual.
Durable Goods Orders numbers were released this week, and they showed slow economic recovery. Durable Goods orders were up by 1.4%, with Core Capital Goods increasing by 0.7%. House prices decreased slightly, and broad market numbers demonstrated a move toward better inflation statistics. We may start to see solid inflation numbers that are improving in the next few weeks as more reports come in.
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