Finally, the prices of gasoline and natural gas are going down
New York (CNN Business) -The Americans who are dealing with historical levels of inflation will finally see some relief where they need it most: in the energy prices that were upward, gasoline and natural gas.
After an incessant climb, prices in gas stations are decreasing.The national average price of the normal gasoline gallon fell to a minimum of seven weeks of US $ 3.35 the gallon, according to the AAA.
The perspectives of household heating costs this winter are also improving significantly.Natural gas futures have been reduced almost halfway in the last two months.Natural gas collapsed more than 11% on Monday, its worst day in almost three years.
Fear for energy prices is one of the main causes for which inflation reached its maximum in 31 years.The cooling of energy prices, if it endures, could relieve inflationary pressure on the US economy and inspire confidence to discouraged consumers.
"This will help consumers considerably," said Robert Yawger, director of Energy Futures of Mizuho Securities, referring to the fall of natural gas futures.
publicidadThe prices in the gas stations began to stabilize when the rumors began that the Biden government would intervene in the energy markets.
By the time President Joe Biden announced on November 23 the greatest release of the strategic oil reserve in the framework of a coordinated release with other countries, oil prices were 10% below its maximum.And that Biden's decision to resort to the strategic oil reserve is considered more a patch than a long -term solution.
The prices of gasoline, which move late, began to go down shortly after.Yes, prices in gas stations are still high.Normal gasoline now costs US $ 3.35 the gallon, compared to US $ 2.16 a year ago.But they have finally stopped uploading.
The White House applauds the decrease in gasoline prices
After months of criticism for high inflation, and high energy prices in particular, the White House applauds the change of course.
"We consider that the decrease in prices in the suppliers is good news. This is due, at least in part, to the actions of the president, since we have taken bold measures to increase the offer and lower prices," he said on TuesdayA CNN a person familiar with the thought of the White House.
Biden expressed last week his hope that gasoline prices will go down.
"These savings are beginning to reach Americans, and should increase in the coming weeks. And it can't happen quick enough," Biden said Friday.
Of course, United States intervention in energy markets is just a part.
The other part is more sinister: oil prices suffered a strong blow after the appearance of the coronavirus omicron variant unleashed fear of a lower demand for gasoline, fuel for airplanes and diesel.The crude had its greatest collapse since April 2020 during the so -called "Black Friday".
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In recent days, oil prices have rebounded, together with the stock market, since Wall Street reacts to anecdotal tests that suggest that the symptoms produced by the omicron variant have been slight.
The crude rose almost 5% on Tuesday, to US $ 72.80 a barrel.This means a 10% increase since Friday and suggests that relief in the gas station could be ephemeral.
Natural gas collapses
For its part, natural gas continues to rise according to last year's levels, but has cooled considerably in recent weeks.
In early October, while the fears of a European style shortage stirred, natural gas reached US $ 6.47 per million British thermal units (BTU).That was the highest level since February 2014.
But that rebound has completely reversed.Natural gas fell 11.5% on Monday, its worst day since January 2019, to US $ 3.66 per million BTU.That is the lowest level since July 15.
Natural gas received a downward boost in part because of the fact that temperatures throughout the United States have been warmer than usual.That has relieved the demand for natural gas, the most common way to heat homes.
"The beginning of winter, warmer than normal, has relieved concerns," said Christopher Louney, vice president of Global RBC raw materials strategy.
Exaggerated shortage fears
Warmer temperatures have also contributed to increasing natural gas inventories, reducing fears that storage levels can fall to alarmingly low levels.
"The United States is not going to run out of natural gas. There is a wide supply," says Rob Thummel, portfolio manager of the Energy Investment Company Tortoiseecofin."We could deal with a fairly extreme cold wave and continue having an adequate supply."
The fears of scarcity in the Natural Gas front were exaggerated, especially considering that the United States is the largest gas producer on the planet.And natural gas production has increased, which has contributed to further reduce prices.
"We are seeing the response of an efficient natural gas market at prices that were perceived as excessive," the American gas association, a sector union, told CNN.
Unlike Europe, the United States produces sufficient natural gas in its territory to be able to export significant amounts in the form of LNG, or liquefied natural gas.
In any case, the natural gas market has gone from worrying about the shortage to worrying about excess supply.
Future market differentials "warn that we are approaching an excess offer. It is a big problem," says Yawger, from Mizuho.
Of course, it is too early to give the alarm on the front of domestic heating.Winter has not even officially started and very cold temperatures of the coming weeks and months could cause a rebound of natural gas futures.
But, for the moment, the energy market offers a ray of hope to American families tired of inflation.
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