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Gas price drops amid Russia-Ukraine tift
Natural-gas prices fell Jan. 3 in electronic European trading as traders seemingly brushed off a pricing dispute between Russia and Ukraine that had threatened European gas supplies.
Natural gas prices fell 42.5 cents to $10.80 per 1,000 cubic feet in electronic trading on the New York Mercantile Exchange by morning in Europe.
One analyst said Russian state-controlled OAO Gazprom’s efforts to restore gas flow had helped ease upward pressure on prices.
“The price that Gazprom wants is more or less the price today, it’s just that all the former Soviet surrogate states have been receiving reduced prices over the years,” said Victor Shum, a Singapore-based analyst at energy consultants Purvin & Gertz. “So that’s why in the interim, you don’t see too much price movement.”
Light, sweet crude oil for February delivery was up 10 cents to $61.14 a barrel.
The price of Nymex crude is about 15 percent below its Aug. 30 high of $70.85. Oil prices remained above $60 a barrel for months after Hurricane Katrina disrupted Gulf of Mexico oil and gas output and dipped below $60 recently amid mild winter weather in the United States.
Heating oil gained slightly to $1.7634 a gallon, while gasoline was at $1.7230 a gallon. Supplies back to Europe European buyers of Gazprom’s natural gas said Jan. 3 they had started receiving full supplies after the Russian monopoly increased shipments through Ukraine following a chorus of protest over its decision to cut off supplies to its neighbor.
The resumption of normal flows was reported by Hungary, Austria and Slovakia, among others, and came as officials with Gazprom and its Ukrainian counterpart, Naftogaz, were scheduled to resume talks over the pricing dispute later Jan. 3.
Gazprom halted deliveries to Ukraine Jan. 1 because Kiev had refused to meet its demands for a fourfold price increase. The state-controlled company said then that it would continue shipping full supplies to its European customers, about 80 percent of which goes through pipelines crossing Ukraine.
About one-quarter of Europe’s gas comes from Russia, and the standoff raised fears of serious gas shortages as Europe suffers through a particularly cold winter.
—The Associated Press
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