Natural Gas Prices Dropped 10% On Dismal COP28 Agreement

During the US trading session, natural gas prices dropped 10%, taking over from the European session. The US Dollar is steady ahead of US CPI and the last Fed’s policy meeting for 2023.

A COP28 draft agreement is set to be presented, with fossil fuels set to be reduced instead of phased out, following opposition from oil and gas-producing countries, including Saudi Arabia.

This is the first time a country organizing the COP-gathering is asking for a less severe agreement in terms of climate control and reduction of fossil fuel usage. The US Dollar (USD) is strengthening, while the Japanese Yen weakens again.

Natural Gas is trading at $2.27 per MMBtu, as Saudi Arabia opposes earlier drafts and asks for an easing of fossil fuels instead of a full phasing-out commitment.

As a result of China’s deflation and decreased demand for liquefied natural gas (LNG), Asian gas traders are applying for trading licences in London.

Additionally, they are unloading excess inventory in Europe, a region heavily dependent on imports.

Europe’s petrol demand is being priced down by futures markets, with January futures trading below April rates. Natural gas is declining because there are no negative temperatures in Europe and there are still traffic problems at the Panama Canal.