IMF reveals reasons for decline in gas prices
Baku, Azerbaijan, Oct.5
By Leman Zeynalova - Trend:
The IMF’s Primary Commodities Price Index has increased by 22 percent since February 2016—that is, between the reference periods for the April 2016 and World Economic Outlook October 2016.
The strongest price increases were for fuels, in particular for oil and coal.
“After hitting a 10-year low in January 2016, oil prices rallied by 50 percent, to $45 in August, mostly due to involuntary production outages that brought balance to the oil market,” said the report.
Natural gas prices are declining—the average price for Europe, Japan, and the US is down by 6 percent since February 2016, according to the IMF.
“Falling oil prices, abundant natural gas production from Russia, and weak demand in Asia have contributed to that decline,” said the report. “With strong supply from Russia, natural gas prices in Europe are at their lowest in 12 years.”
The IMF said that in the US, natural gas prices have instead edged higher on account of stronger demand from the power sector, reflecting hotter-than-expected weather.
Coal prices have rebounded, with the average of Australian and South African prices 32 percent higher than levels in February 2016, according to the report.