06
Apr
2021

Pricewatch | 6 Apr 2021 | Gas Matters Today

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The bears took over oil trading on Monday, with crude prices dropping on the back of persistent concerns over the impact of rising Covid-19 cases in major economies around the world, including India, which announced its highest number in infections since the pandemic began over a year ago.

Front-month Brent and WTI fell by 4.2% and 4.6% respectively on Monday, with the announcement on 1 April by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group collectively known as OPEC+, of a production ramp-up starting in May – a decision that took markets somewhat by surprise – adding to the bearish sentiment.

India announced on Monday that daily cases of Covid-19 infections had surpassed 100,000 – a record high for the country, bringing total cases in one of the world’s biggest oil importers to over 12.5 million. The country’s Covid-19 death toll stood at 165,132 on Monday – the fourth highest in the world. The state of Maharashtra, home to 114.2 million people, and its capital, Mumbai, has now been put into lockdown for the second time in a year, which is expected to drag fuel demand down.

Meanwhile, the US and Iran are set to attend talks this week in Vienna with the aim of reviving the Iran nuclear deal, which the new Biden administration wishes to return to after the accord was abandoned by the Trump administration. Should negotiations be successful, Iran could eventually increase its crude output, which currently tempered by US sanctions.

In Europe’s gas markets, the picture was little changed on Monday, due to the long Easter weekend in many parts of the continent. The front-month UK NBP contract recorded a small 0.6% increase to USD 6.56/MMBtu, while the Dutch TTF rose 0.3% to USD 6.64/MMBtu.

The month-ahead JKM contact was stable from 1 April at USD 6.93/MMBtu, while US gas benchmark Henry Hub was down by USD 0.13/MMBtu, closing at USD 2.51/MMBtu, a drop due in part to anticipated mild temperatures in the Northeast and Midwest regions of the US.

Front-month futures and indexes at last close with day-on-day changes (click to enlarge):

Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.

Contact the editor:

Kostya Tsolakis
[email protected]

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