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Natural Gas Price Up By 30% Amid Israel-Palestine War

Spot prices have increased to $18.345 and Brent crude oil reached $91.59 per barrel.

By Ara ZohrabianPublished 6 months ago 3 min read
Natural Gas Price Up By 30% Amid Israel-Palestine War
Photo by sippakorn yamkasikorn on Unsplash

Liquefied natural gas (LNG) prices have risen more than 40 percent to $18,345 per million British thermal units (/MMBtu) since the Oct. 7 Israeli-Palestinian war.

According to reports, geopolitical concerns have filtered through the oil and gas markets. Some North Asian LNG buyers have halted plans to buy more fuel for the winter after the attacks in the Middle East, risking supply and raising global prices.

Asian spot LNG shipments were offered as high as 10 s/MMBtu as of Oct. 13, the highest level in about eight months, according to traders.

Israel's Energy Ministry halted gas production at the Chevron-operated Tamar platform on October 9 due to attacks from both sides, limiting supplies from the region. The Tamas gas field produced 10.25 billion cubic meters in 2022, most of which was used domestically and 15% was exported to Egypt and Jordan.

Chevron suspended natural gas exports through the Eastern Mediterranean pipeline between Israel and Egypt, and the company said it would deliver gas to Jordan through an alternative pipeline.

In addition, Chevron LNG workers in Australia announced further strikes on October 9, which could disrupt flows and raise prices.

European news network Euronews reports that Europe is more than 90% capacity, including a large amount in 2022-2023. gas inherited from the European winter of It noted that although the EU is unlikely to experience supply difficulties this winter, the geopolitical impact of global gas distribution will keep prices high. Oil cargo flows

Along with oil supply disruptions and voluntary cuts by OPEC+ countries and Russia, the current state of war in the Middle East has not directly affected oil flows.

In the longer term, however, OPEC+ cuts and current geopolitical developments may affect oil flows.

GlobalData, the parent company of Offshore Technology, reported that Brent crude oil prices rose $1.69, or 1.9% per barrel, on October 18. Prices rose 2% amid a possible oil supply disruption after an explosion at a hospital in Gaza killed hundreds of people.

According to Offshore Technology, Shell's share price rose to a record high of 2,763 pence on Monday due to the war, which has led to higher oil prices. Shipping and trade sources said on October 9 that the port of Ashkelon, about 10 kilometers from the Gaza Strip, and its oil terminal were closed, Reuters reported. Two other ports, Haifa and Ashdod, remained open.

Western countries are experiencing colder days than normal, but potential disruptions are keeping the market buoyant, although European gas is almost at full capacity.

Oil and gold prices are facing potential fluctuations due to the ongoing Middle East conflict. Diplomatic initiatives and humanitarian concerns are causing market sentiments to shift. Brent crude and gold spot prices have experienced significant changes. The conflict between Israel and Hamas is leading to concerns about its impact on oil-producing regions and crucial chokepoints such as the Strait of Hormuz. While gold prices have risen due to geopolitical risk and positive momentum, there are ongoing negotiations to secure the release of hostages held by Hamas and the possibility of a ground incursion in northern Gaza. Despite this, the conflict has not yet demonstrated a significant risk to the oil trade, and gasoline prices in the United States have fallen, mainly due to ample supply and refining margins.

While the notion of a regional - even global - spread of conflict is valid, it is also quite reasonable at this point to maintain - and delay - a risk premium of around $7-10 per barrel since the start of the war. every headline about the escalating fighting has no relative impact on the oil business.

Fuel pump prices in the US right now are perhaps the best indicator of how the wider oil business should deal with this crisis. The price of gasoline motorists in the United States actually pay has decreased, from $3,554 a gallon on Thursday to $3,867 a month ago and $3,820 a year ago.


About the Creator

Ara Zohrabian

Ara Zohrabian, an author and an expert in fundamental and technical analysis. Currently he is a Senior Analytical Expert at IFCMarkets Corp.

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  • C.S LEWIS6 months ago

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