BAKU, Azerbaijan, Dec.7
By Leman Zeynalova – Trend:
A less urgent need to rebuild stocks will weigh on coal demand, Trend reports with reference to Capital Economics, the UK-based research and development company.
“Coal prices have tumbled since late October following government intervention in China that included ordering the top two coal-producing regions to raise output. Since then, production has surged and stocks at major ports have risen sharply. A less urgent need to rebuild stocks will weigh on demand,” the company said.
Moreover, analysts of Capital Economics note that natural gas prices, outside the US, rebounded in November.
“Asia LNG prices reached a fresh high as demand for imports remained strong. Meanwhile, the rise in European gas prices was triggered by the news that Germany’s energy regulator suspended the certification process of the Nord Stream 2 pipeline. The European gas market has tightened, with stocks falling quicker than seasonal norms. Not only are stocks at Gazprom-controlled sites in North-West Europe much lower-than-usual, they are also falling amid little evidence of additional Russian flows, despite suggestions from President Putin they might rise,” said the company.
Most commodity prices fell following the emergence of Omicron.
“Fears that the new variant will lead to reduced travel activity, together with the decision by OPEC+ to press ahead with raising output, explain the especially sharp fall in oil prices and the net-long position held by investors in the futures market. Other commodity prices have also fallen, albeit not by as much as oil. Industrial metals markets may have taken some comfort in the continued decline in exchange stocks. But given the still-large gap between prices and the survey data in China, we wouldn’t be surprised if prices fall further in the weeks ahead,” said Capital Economics.
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