Energy Commodities Experience Sharp Declines in Q1 as Uncertainty, Supply Concerns Weigh on Prices
(MENAFN) The first quarter of the year was a challenging period for energy commodities, with both brent oil and natural gas experiencing significant declines. Brent oil fell by 5.3 percent, while Natural gas traded on the New York Mercantile Exchange plummeted by 50.5 percent.
One factor contributing to the decline in Brent oil prices was the expectation of a global economic recession, combined with mixed signals about the economic and demand-oriented recovery in China, the world's largest oil importer. The increase in oil stocks in the US also put pressure on Brent oil prices. The news that the US would sell oil to the market from its strategic oil reserves further contributed to the decline in Brent oil prices.
Natural gas prices also experienced a sharp decline in the first quarter, dropping below USD2 for the first time since May 2021. This decline was due to a combination of factors, including warmer weather conditions and saving efforts in the industry. As the weather was less severe than expected, demand for natural gas decreased, leading to lower prices. Additionally, efforts to conserve natural gas in the industry contributed to the decline in prices.
Overall, the first quarter of the year was a challenging period for energy commodities, with both Brent oil and natural gas experiencing significant declines. Uncertainty about the global economic outlook, combined with supply concerns and efforts to conserve energy, contributed to the decline in prices. As the world continues to grapple with the ongoing pandemic and an uncertain economic outlook, it remains to be seen how energy commodities will perform in the months ahead.
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