A week of underlying decline in crude oil futures turned into a collapse yesterday as prices plummeted to their lowest levels so far this year, with the main drivers being growing concerns over commodity demand in China and economic worries in the US.
Oil was not alone – natural gas, coal and carbon prices all registered steep falls, except in the US, where natural gas prices were up to their highest level in weeks.
Meanwhile, global stocks had their worst day since the first week of August, reigniting the panic that swept through markets before the spectacular recovery of subsequent weeks.
The Brent November crude oil contract fell by 4.9%, from USD 77.52/barrel on Monday to USD 73.75/barrel, the lowest month-ahead price since December 2023. The price continued downwards in early trading on Wednesday.
WTI, the US benchmark, fell by 4.4%, from USD 73.55/barrel to USD 70.34/barrel. It, too, continued to slide on Wednesday, falling below the USD 70/barrel threshold at one point.
Adding to the downwards pressures are expectations that the members of OPEC+ will start to lift output curbs from the start of next month – although they have said that this policy remains subject to market developments – and the likely resumption of some exports from Libya following the recent shutdown.
European natural gas prices plunged by around 4%.
In continental Europe, TTF fell by 3.8%, from USD 12.52/MMBtu to USD 12.04/MMBtu, its lowest close since Ukraine’s incursion into southern Russia around a month ago. The price appeared to stabilise on Wednesday morning.
In the UK, NBP was down 4.1%, from USD 12.22/MMBtu to USD 11.72/MMBtu.
In Asia, the JKM LNG benchmark fell by 1.9% to USD 13.83/MMBtu, its lowest level in a fortnight, with the larger fall in TTF widening the TTF-JKM spread to USD 1.79/MMBtu.
In the US, Henry Hub rose by 3.6%, from USD 2.13/MMBtu to USD 2.20/MMBtu. The price is being bolstered by a fall in production to around 101 Bcf/d and higher LNG exports, currently over 13 Bcf/d.
European coal and carbon prices took their cue from natural gas and the various factors contributing to its decline.
API2 coal fell by 2.3%, from USD 4.78/MMBtu to USD 4.67/MMBtu, while EU carbon dioxide emissions allowances were down 3.2% to EUR 67.56/tonne.
Sign up for Gas Matters Today's free daily newsletters, with top news, price reporting, and more
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.
Got a question or comment about this story or other energy matters? Drop our editor, Penny Sukhraj, a line: [email protected]
Subscription Benefits
Our three titles – LNG Business Review, Gas Matters and Gas Matters Today – tackle the biggest questions on global developments and major industry trends through a mixture of news, profiles and analysis.
LNG Business Review
LNG Business Review seeks to discover new truths about today’s LNG industry. It strives to widen market players’ scope of reference by actively engaging with events, offering new perspectives while challenging existing ones, and never shying away from being a platform for debate.
Gas Matters
Gas Matters digs deep into the stories of today, keeping the challenges of tomorrow in its sights. Weekly features and interviews, informed by unrivalled in-house expertise, offer a fresh perspective on events as well as thoughtful, intelligent analysis that dares to challenge the status quo.
Gas Matters Today
Gas Matters Today cuts through the bluster of online news and views to offer trustworthy, informed perspectives on major events shaping the gas and LNG industries. This daily news service provides unparalleled insight by drawing on the collective knowledge of in-house reporters, specialist contributors and extensive archive to go beyond the headlines, making it essential reading for gas industry professionals.
