Each week, Al Attiyah Foundation publishes its energy market review, bringing you the latest global news from the oil, gas and petrochemicals sector.

Al-Attiyah Foundation - Weekly Energy Market Review

Oil Hovers Below Recent Highs; Ends Week Up

Oil traded just below multi-year highs on Friday, 22 October, with the bullish sentiment about low supplies tamped by concerns from world leaders that demand disruptions from the COVID-19 pandemic may not be over. Brent crude futures rose 1.1%, to settle at USD85.53 a barrel. The benchmark, which touched a three-year high of USD86.10 on Thursday, was up 1% in the week, its seventh weekly gain. US West Texas Intermediate (WTI) crude futures gained 1.5%, to settle at USD83.76 a barrel, not far off a seven-year high hit this week. The contract gained 1.7% on the week and was up for a ninth straight week. Prices have been boosted by worries about coal and gas shortages in China, India and Europe, spurring some power generators to switch from gas to fuel oil and diesel. Also, prices pulled back from earlier intraday highs after German Chancellor Angela Merkel said the pandemic is not yet over. In the meanwhile, US crude found support last week as investors eyed low crude stocks at the US storage hub in Cushing, Oklahoma. As US Energy Information Administration data on Wednesday showed crude stocks fell to 31.2 million barrels, their lowest level since October 2018.

Asia LNG Prices Slip Despite Strong Competition, Limited Russian Supply

Asia liquefied natural gas (LNG) prices slipped last week but are expected to remain at high levels on concerns over low European gas storage levels due to strong competition from Asia and diminishing hopes for more gas supply from Russia. The average LNG price for December delivery into Northeast Asia was estimated at about USD34.50 per metric million British thermal units (mmBtu), down USD3.90 from the previous week, industry sources said. There are ongoing and projected production outages that could remove an incremental 4% of monthly supply, from the expected market between November and February, Rystad Energy said. However, shipping rates which have more than doubled from earlier this month are also expected to put upward pressure on prices. US natural gas futures climbed about 3% to a one-week high on Friday on forecasts for demand to rise as the weather turns seasonally cooler and on a slight increase in global gas prices that should keep demand for US liquefied LNG strong. Front-month gas futures rose 3.2% to settle at USD5.28 per mmBtu, their highest close since 15 October.

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