Gas prices soar as the US is set to broaden sanctions against Iran’s Oil sector.
The US Dollar Index partially recovers from Tuesday’s decline, driven by a big miss on PMI numbers.
Natural Gas (XNG/USD) holds onto recent gains on Wednesday after a two-day rally sparked by a possible escalation of tensions in the Middle East as the US is set to extend sanctions on Iran’s Oil sector. Earlier last week, the Biden administration said it was readying a sanction package that would not disrupt Oil exports to avoid ramping up prices. However, by backtracking and now issuing sanctions on the Iranian oil sector, tensions could flare up again in the coming days, fuelling prices in the overall energy space.
Meanwhile, the US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, fell sharply on Tuesday after a big miss on the preliminary US Purchasing Managers Index (PMI) numbers for April. Apart from the softer-than-expected data, the Manufacturing component fell below the 50 level, showing a contraction in the sector. The US Dollar is recovering though on Wednesday, with traders assessing expectations about the time of the initial interest rate cut from the US Federal Reserve (Fed)..
Natural Gas is trading at $2.15 per MMBtu at the time of writing.
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