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Natural Gas Prices Struggle Amid Geopolitical Tensions in 2024

Natural Gas Prices Struggle. The energy market faced challenges in 2024, notably through fluctuating natural gas prices and oil market volatility due to geopolitical tensions, oil production forecasts, and the impacts of proposed tariffs.

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AI Rating:   5
Natural Gas Prices
Natural gas prices experienced significant fluctuations throughout 2024, ultimately achieving a year-to-date high of US$3.76 per metric million British thermal units but remaining under pressure for most of the year due to oversupply. A notable decline took place to US$1.51 in February, attributed to a moratorium on new LNG export permits. This moratorium exacerbated the oversupply situation, highlighting a significant challenge for producers.

Oil Prices Volatility
Oil prices showed volatility but stabilized partly due to ongoing production cuts from OPEC+ and increasing demand in key economies. US oil production is forecasted to average 13.2 million barrels per day. Geopolitical tensions, like the Israel-Hamas conflict, added uncertainty to global supply chains. With US oil prices hovering around US$70, companies are cautious about overproducing, underlining the importance of maintaining a balance between supply and demand to protect margins.

Potential Tariff Impacts
Trump's proposed tariffs on Canada and Mexico raise concerns over possible price increases in oil and gas products. Growing apprehension exists that tariffs could lead to reduced trade and higher domestic prices, counteracting efforts to combat inflation. Past experiences, such as the 2018 trade war, highlight potential risks for future energy markets.

Geopolitical Factors
Geopolitical instability continues to be a focal point for market watchers moving into 2025. While some experts believe ongoing conflicts may eventually stabilize, new dynamics and the resolution of existing tensions could heavily influence both oil and gas pricing in upcoming years. The performance of major economies, seasonal weather, and unexpected geopolitical developments remain critical to future market conditions.
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