Gas prices are soaring. Natgas at most since 2008.

It is going to be an extremely expensive heating season. The rally in energy commodity prices seems to be in full swing, and gas prices in both Europe and the United States may be a particular determinant of this rally. They can still go up ahead of the winter season.

Price natural gas futures quoted in the United States seems to continue to rise strongly, and is at the level last observed 7,5 years ago, approaching $ 6,5 per MM / Btu (British thermal unit). This means that since the beginning of the year, the price of gas has increased by 150 percent, of which by as much as 74 percent. only for the last quarter. The upcoming winter season in the north of our globe seems to be driving the demand for this raw material even more. In turn, gas shortages in Europe are the largest in more than a decade, considering the current time of the year.

Why is drought increasing gas demand?

According to international sources, Russians and Gazprom they have no intention of increasing gas flows to EuropeOn the other hand, imports in China are already twice as high as in 2020. In turn, the Americans are becoming the main exporter of LNG, although they themselves also have problems with gas reserves before the winter, as the level of inventories is below the five-year average.

Moreover, about half of the US territory is still drought, preventing hydropower from producing electricity because the reservoirs and dams are empty and the water flow is unable to rotate the turbines. Hence, the shortages in production can be covered by gas-fired power plants.

A rate hike in New Zealand

New Zealand's central bank has decided to make a raise main interest rate from 0,25 to 0,5 percent It was the first increase since 2014. The market was expecting it, and therefore NZD / USD exchange rate he did not react with a strong growth.

As can be read in the announcement for the decision, as far as the inflation outlook is concerned, headline inflation is expected to rise above 4% in the near term and then to return to 2%. in the medium term. The rise in inflation in the near term is fueled by higher oil prices, rising transport costs and the impact of supply shortages.

The bank's council added that further removal of the monetary stimulus is expected over time, with future moves contingent on medium-term inflation and employment outlook. This last sentence, in particular, may have confused buyers of New Zealand dollars as there was no clear path for possible further increases. Hence, the NZD / USD exchange rate finally seems to drop to the level of 0,6920 today.