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


Oil prices rise on signals OPEC might cut output

Oil prices ended higher on Friday, 26 August, boosted by signals from Saudi Arabia that OPEC could cut output, but trading was volatile as investors digested and ultimately shrugged off warnings from the head of the US Federal Reserve about economic pain ahead.

Brent crude futures rose US$1.65 to settle at US$100.99 a barrel. US WTI crude futures rose 54 cents to settle at US$93.06 a barrel. Overall, Brent gained 4.4% for the week, while WTI was set to rise 2.5%.

Last week, Saudi Arabia, OPEC’s de facto leader, flagged the possibility of production cuts to offset the return of Iranian barrels to oil markets should Tehran clinch a nuclear deal with the West. Other OPEC member states, including Iraq, Venezuela, UAE, and Kazakhstan, were aligned with Saudi Arabia’s thinking and expressed readiness to intervene and restore balance in the oil market.

Oil prices briefly fell after Fed Chair Jerome Powell said that tight monetary policy may be in store for some time to fight inflation, meaning slower growth and a weaker job market. Meanwhile, some European Central Bank policymakers want to discuss a 75 basis point interest rate hike during a policy meeting on 8 September, even if recession risks loom, as the inflation outlook is deteriorating.

Benchmark Crude Oil Prices 27 Aug

Asian LNG price hits record high ahead of NS1 outage

Asian spot liquefied natural gas (LNG) hit a fresh record high this week as South Korean and Japanese buyers restocked for the winter and a planned outage at the Nord Stream 1 pipeline pushed up European demand.

The average LNG price for October delivery into northeast Asia was estimated at US$70.50 per million British thermal units (mmBtu), up US$13.50 from the previous week, according to industry sources.

Meanwhile, there is clearly a lot of panic in the European gas market, analysts say, especially with prices spiking in recent days due to fears that Russian gas flows would not return even after planned maintenance on the Nord Stream 1 pipeline.

Russia’s Gazprom has announced a three-day outage for the pipeline, from 31 August until 2 September, which is currently running at 20% of its total capacity, piling pressure on Europe as it seeks to fill up gas storage facilities ahead of winter. Europe’s gas storage sites were just over 78% full, Gas Infrastructure Europe data showed, approaching a European Commission target of 80% by 1 October.

In the United States, front-month gas futures for September delivery fell by 7.9 cents on Friday, to settle at US$9.30 mmBtu. For the week, the front month was down about 0.4%.

Benchmark Gas Prices 28 Aug

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