By Timothy S. Snyder, Matador Economics
Markets are still a bit nervous concerning the possibility of a recession in 2025. This is what drove prices in the markets yesterday. Hopefully it will be a better day today. Remember, we get CPI and PPI this week.
U.S. liquified natural gas producers are looking at increasing the delivery prices for our LNG, as rising costs for production are taking their toll. Not to mention the fact that natural gas prices have more than doubled since this time last year. The price on March 10, 2024 was $1.805 per mm BTU and yesterday’s closing price was $4.491 per mm BTU.
If you look across the energy spectrum, crude oil prices have fallen since the beginning of the new year, as have gasoline and diesel fuel, while natural gas continues to climb. Feeding this rise in prices is increased demand, from a much colder than expected winter season and falling inventories for natural gas.
The inventory level this time last year was 2,325 billion cubic feet, billion cubic feet while last week’s total showed 1,760 bcf. Tighter inventories and higher demand are pushing the natural gas prices higher. This will affect more than just the cost of heating your home as natural gas is a big input cost for developing fertilizers for agriculture production!
Last night’s EIA Report for on-highway fuel prices showed a slight trend lower for gasoline week/week, but a substantial drop in diesel fuel. Gasoline on a U.S. average fell .09 cents per gallon, while diesel fuel fell 5.3 cents per gallon.
Concerns over recession are holding back demand, while threats of a recession loom. Real or not, market psychology has the markets tied up in potential risk.
U.S. winter weather
Spring type weather is growing across the U.S., with warmer temps and very low probabilities for severe weather today. Wednesday through Friday the threat for severe weather grows and we’ll be watching! It’s kind of nice to have a mostly calm day.
More energy commentary is available at www.matadoreconomics.com
