WTI crude oil futures rose 1 percent on Thursday to about $103 a barrel. U.S. natural gas prices, on the other hand, fell about 15 percent.
Oil investors may be reacting to signs that U.S. crude inventories fell sharply last week, while on top of that the European Union is considering a ban on Russian oil imports in the wake of the invasion of Ukraine and is looking at ways to offset potential shortages.
China emerges from Covid restrictions
The situation in the oil market also appears tense as OPEC members struggle to meet production targets. OPEC member Libya reported Wednesday that it is losing more than 550,000 barrels of oil per day due to a blockade of major fields and export terminals.
China's demand outlook also seems to be weighing on the oil market. The world's largest importer of the commodity has been slow to ease covid restrictive and lift the ensuing production restrictions that have hit manufacturing operations and global supply chains.
Since mid-March, the price of oil has seems to be hovered between $92.60 and $114. The area of USD 100-105 therefore appear to be the middle of this fluctuation range. And only the emergence of new factors could lead to a potential break through these levels.
Gas: minimal price decrease after huge price increase
Price volatility has also been a feature of the natural gas market recently. Contracts for this raw material in the USA fell from the highest level in 30 years reached at the beginning of the week - 8.065 USD per million British thermal units - by about 15 percent, below 6.9 USD. This may have been due to weather forecasts of warming and thus may have somewhat discouraged investors, reducing demand for gas.
However, the recent decline doesn't change the fact that contract values are up about 90 percent this year. Which may have been related to, among other things, the fact that a harsh winter in some regions of North America extended into spring, causing domestic inventories to fall well below the five-year average.
Earlier in the week, an unexpected snowstorm hit the Northeastern U.S., knocking out power to hundreds of households and increasing demand for heating, which may have depleted natural gas inventories and prompted the need to replenish them.
Europe and China cut supplies from Russia
At the same time, the United States is exporting record amounts of LNG, mostly to Europe. This is because the Old Continent countries are trying to give up Russian gas by imposing sanctions for Russia's invasion of Ukraine.
Natural gas production seems to be growing in China. In fact, Beijing is pushing state-owned producers to increase their capacity to reduce LNG imports, which have already fallen by 11 percent in the first quarter of this year.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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