Natural gas which has been receiving a lot of takers in the last nine days fell a little today on the New York Mercantile Exchange. Thus, snapping the longest rising streak since October 2006 amid forecasts for moderate temperatures in the U.S., the natural gas futures for January delivery dropped today.
Though the drop of 0.4 percent to $3.974 per million British thermal units in electronic trading on the New York Mercantile Exchange is not significant, it breaks the winning streak. There has been an unprecedented increase in the gas prices which rose 12 percent in the previous eight trading sessions amidst the forecasts of colder weather conditions.
Cold weather conditions increases the demand for natural gas and the prices. According to weather predictions temperatures from the East Coast to Texas will be above normal through Dec. 6. Moreover, as more than 49 percent of U.S. households use natural gas for heating and 39 percent use electricity, the demand for it is expected to increase in the next couple of months.
Iran Willing to Dominate OPEC
OPEC, a cartel of oil producing countries will have Iran after the nuclear deals; however, the country is willing to become a dominant player here. The second biggest producer in the cartel, Iran is expected to cover the losses it incurred during the economic sanctions imposed by the US government on oil exports.
The confidence of Iranians has gone up several notches up after nuclear deal with the West which they consider a victory over the U.S. According to reports, the meeting to be held in Vienna will be a ground where Iranian oil negotiators led again by industry veteran Zanganeh, will seek to reassert Tehran’s authority in the OPEC.
The declining crude price are expected for decline further considering the addition of the extra oil from Iran which will soon be available for the world after more than a year’s economic blockade. The OPEC will again see the traditional rivalry between Iran and regional political powers Saudi Arabia, and Iraq.
The U.S. Emerging as a Major Oil Producer
The significant improvement in the oil production by the United States has been the major development in the currency year. This has largely been spurred by production from new shale technology which may give a tough challenge to OPEC which has always been manipulating the oil production to profit and has often been criticized for such a manipulation.
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