European Gas Prices Plunge After Russia-Ukraine Deal
After several weeks of growth, the IHS Markit Materials Price Index (MPI) declined 0.3% for the week starting Jan. 6, largely due to an 18.5% fall in European gas prices. IHS Markit attributes the large drop to a 5-year agreement between Russia’s Gazprom and Ukraine’s Naftogaz, guaranteeing a flow of gas to Europe. The drop in European gas prices facilitated a decline of 11.1% in overall gas prices, while coal prices dropped 2.3%. Oil prices decreased 0.4% last week, but have since risen 5% following the death of Iranian General Qasem Soleimani. Gold prices also rose as a response to General Soleimani’s death, and IHS Markit expects some volatility in Middle Eastern markets.