NATURAL GAS FLIRTS WITH BREAK BELOW $2 AS US RAMPS UP GAS RULES
- Natural Gas snaps below $2.10 on US measures to promote greener consumption.
- Traders are seeing a potential big chunk of demand never returning to markets with US Gas stove measures.
- The US Dollar Index is staying put ahead of the Fed meeting Wednesday.
Natural Gas (XNG/USD) has breached the floor of 2023 at $2.10 and is now entering an area not seen since August 2020. The decline comes with efforts from the US and its president Joe Biden to take measures towards promoting a greener economy. A moratorium on LNG export installation in the US is one such measure, while more and stricter efficiency standards for household Gas stoves is another. Overall this means less demand from the US for Natural Gas.
The US Dollar (USD), which is negatively correlated to Gas prices, was trying to sprint away on Monday with a mix of safe-haven inflows after three US military people were killed over the weekend during a drone strike on a US base in Jordan. The US Defense administration was quick to issue comments that it is not looking for retaliation or expanding military action in the region. This defused the brewing risk-off sentiment and pushed the US Dollar Index (DXY) back to its near opening price from Monday in Asia.
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