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

Oil up over 2% after US debt deal

Oil prices rose over 2% on Friday, 2 June, after the US Congress passed a debt ceiling deal that averted a government default in the world’s biggest oil consumer and as jobs data fuelled hopes for a possible pause in Federal Reserve interest rate hikes.

The focus is now turning to a meeting of OPEC and its allies this weekend. Brent futures settled at US$76.13 a barrel, while US West Texas Intermediate (WTI) crude closed at US$71.74. For the week, both contracts were down about 1% in their first weekly losses in three weeks.

The US Senate approved a bipartisan deal to suspend the limit on the government debt ceiling, following approval in the House of Representatives, staving off a default that would have rocked financial markets. US employment increased more than expected in May, but a moderation in wages could allow the US Federal Reserve to skip a rate hike this month for the first time in more than a year, which could support oil demand.

Oil traders are watching the meeting of the OPEC and allies this Sunday, 4 June. The group announced a surprise production cut of 1.16 million barrels per day in April, but resulting price gains have been erased and crude is trading below pre-cut levels.

Benchmark Crude Oil Prices 4 June

Asian spot LNG prices slip for 6th straight week

Asian spot prices of liquefied natural gas (LNG) fell for the 6th straight week to their lowest level in more than two years, while European LNG prices also declined on sluggish demand and high inventories.

The average LNG price for July delivery into northeast Asia was down 5.3% from the previous week at US$9 per million British thermal units (mmBtu), according to industry estimates, the lowest since April 2021. Asia LNG prices have not risen week-over-week in the 22 weeks since mid-December.

Poor downstream demand and high storage levels were driving Asian prices lower.

In Europe, traders and consumers are watching for signs on the reopening of Norway’s Hammerfest LNG plant, which was shut down this week after a leak. Operator Equinor said it was too soon to say when production would resume.

Hammerfest LNG, Europe’s only such large-scale project, can process 18.4 million cubic metres (mcm) of gas per day when fully operational. The front-month contract on the Dutch TTF fell to 7.39 per mmBtu. Despite heavy maintenance at Norwegian gas production sites, storage levels in Europe are very healthy at an aggregate 69% full, and LNG was being imported continuously.

Benchmark Gas Prices 4 June

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