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


Oil futures ease 1% as China widens COVID-19 curbs

Oil prices eased about 1% on Friday, 28 October, after top crude importer China widened its COVID-19 curbs. The crude benchmarks were poised for a weekly gain on supply concerns and surprisingly strong economic data.

Brent futures fell US$1.19 to settle at US$95.77 a barrel. US WTI crude fell from US$1.18 to US$87.90. For the week, Brent rose about 2.4% and WTI was up about 3.4%.

Chinese cities ramped up COVID-19 curbs on Thursday, 27 October, sealing up buildings and locking down districts after China registered 1,506 new coronavirus infections, up from 1,264 new cases a day earlier, according to the country’s National Health Commission. The IMF expects China’s growth to slow to 3.2% this year, a downgrade of 1.2 points from its April projection, after an 8.1% rise in 2021.

However, economic strength in the two major economies limited oil losses.

US gross domestic product (GDP) grew in the third quarter, demonstrating resilience in the world’s largest economy and oil consumer. The German economy also expanded unexpectedly in the third quarter, as seen on data last Friday, with Europe’s largest economy keeping recession at bay despite high inflation and energy supply worries ahead of a looming European ban on Russian crude imports.


Asian LNG prices edge down on ample inventories

Asian spot LNG prices slipped last week, extending declines as strong inventory levels and ample year-end cargo supply muted buying activity. The average LNG price for December delivery into northeast Asia was US$30 per mmBtu, down US$1 from the previous week.

Given fairly adequate storage in northeast Asia and ample cargo supply booked for November and December deliveries, buyers in the regions have seen little urgency to buy additional cargoes at the moment, analysts said.

Asian buyers have been stockpiling supplies of LNG ahead of the peak winter power and gas demand season, though unexpected supply disruptions or a cold snap could lead to a spike in demand. In Europe, prices of LNG to northwest Europe were assessed at US$28.22 per mmBtu on 27 October.

This comes amid high storage levels and as LNG cargoes wait to offload in Europe, which has led to TTF prices trading at a discount to Asian spot LNG. Dozens of LNG ships have been circling off the coasts of Spain for weeks, unable to secure slots to unload their cargoes as plants that convert the fuel back to gas are operating at maximum capacity. They are likely to stay there until late November in anticipation of a rise in European gas prices.

Benchmark Gas Prices 30 Oct

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