Natural Gas Prices Fluctuate as Japan Increases Reserves

Mar 22, 2011, 06:24 by David Hope

Natural gas prices continue to fluctuate as the world energy markets keep a close eye on Japan's recovery.

Market fundamentals are the main driving force behind fluctuations in the price of crude oil and natural gas, the International Energy Agency said from Vienna.

The crisis in Libya closed oil production in one of Africa's top oil-producing nations. The onset of the crisis in early March helped push crude oil and gasoline prices to post-recession highs despite efforts from Saudi Arabia and other crude producers to make up for shortfalls.

Japan, meanwhile, is taking on more crude and natural gas to make up for the energy deficit from its nuclear crisis.

The IEA said it compared exchange-traded commodities like crude oil, which is controlled by rules and regulations, to non-exchange traded commodities between physical buyers and sellers and found similar price variations.

This, the IEA said, suggests that market speculation isn't the only cause of volatility in the energy market, noting increased energy demand is influencing prices.

"Unusually high volatility in commodity markets post-2007 does not appear unique to crude oil traded on exchanges," the agency said.

The IEA said there were other factors like data transparency within actually energy markets that are at play in oil price volatility.

Soruce: UPI