Each week, Al Attiyah Foundation publishes its energy market review, bringing you the latest global news from the oil, gas and petrochemicals sector.
Oil jumps 4% after week-long selloff, falls for a fourth week
Oil prices jumped more than 4% on Friday, 17 November, rebounding from a four-month low hit in the previous session, as investors who had taken short positions took profits and while US sanctions on some Russian oil shippers lent support.
Brent crude futures settled up US$3.19, or about 4.1%, at US$80.61 a barrel, while West Texas Intermediate crude (WTI) rose US$2.99, or 4.1%, at US$75.89. Some of the losses were offset after the US imposed sanctions this week on maritime companies and vessels for shipping Russian oil sold above the Group of Seven’s price cap.
Still, both benchmarks ended the week more than 1% lower, their fourth straight weekly decline, mostly weighed down by a rise in US crude inventories and sustained record-high production.
China’s deepening property crisis and slowing industrial growth also weighed. US oil producers have been cutting the number of active drilling rigs for nearly a year due to weaker prices.
The oil rig count, however, this week rose by six, the most since February, according to energy services firm Baker Hughes. The Organization of the Petroleum Exporting Countries (OPEC) is set to consider whether to make additional oil supply cuts when they meet later this month.
Asian LNG spot prices remain steady amidst high stocks, muted demand
Asian spot prices for liquefied natural gas (LNG) were little changed this week, amidst high inventory levels in East Asia which kept demand from the region muted.
The average LNG price was at US$16.70 per million British thermal units (mmBtu), following estimates of industry sources, versus US$16.50 per mmBtu last week.
Analysts said demand from end-users in northeast Asia has remained largely weak, with market participants flagging continued high terminal inventories in South Korea and Japan in particular. Recent cold weather and forecasts for Tokyo in the coming weeks did little to spur significant spot market activity by Japanese buyers, while Seoul is set for above-average temperatures through to the year-end, suggesting little scope for a substantial power and heating demand rebound.
European gas and LNG markets remained well-supplied with gas storage levels still hovering above 99% even with net withdrawals seen across several countries.
In the US, natural gas futures fell about 3% to a three-week low on Friday on record output that should enable utilities to keep injecting gas into storage through late November.
For the week, the price was down about 2% after falling about 14% last week.
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