Hamburg, Germany- After the Russian state-run Gazprom halved the Natural Gas supply is flowing from Russia to Europe with 20% capacity, the global prices surged. Russia has blamed the technical problems, including repairing the turbine in the Nord Stream 1 pipeline, for a production cut, but Germany says the move is political. The front gas month prices at the Dutch Title Transfer Facility (TTF), the European benchmark for Natural Gas trading, jumped to USD 292 per megawatt hour.

The surge in energy and utility costs drives up the downstream derivative market, pushing inflation and squeezing the margins and revenue among the significant enterprises. With the fresh surge in gas prices, the Euro currency hit the lowest level, pushing the region into recession.

In the US, the average supply of Natural Gas fell this week with surging demand from its derivative market. On 16^th August, the Natural gas futures surged to close at USD 9.33 Per MMBtu, prompted by high demand as scorching temperature cranks up the need for air conditioners and power generation units. The primary issue for US Natural Gas is that inventory levels are historically average, leaving the market less of a buffer, further boosting the prices. However, the futures for September delivery dropped from a fresh high of USD 10.02 per MMBtu to USD 9.19 per MMBtu, which is still on the higher side.

According to ChemAnalyst, the price of Natural Gas will increase in the global market with bullish demand from the downstream derivative industry. Exports from the United States (US) to the European region will increase, reducing prices. Gazprom will further tighten the European supply and redirect its route to the Asian region. In the Asian market, the Natural Gas prices will cool down but remain on the higher end, oscillating in the prices of Formaldehyde and MTBE. However, Methanol prices will reduce in the forthcoming weeks as producers try to find an alternative conventional source to fulfill the end-user demand.