Oil prices hit a 10-month high last Friday and posted a third weekly gain as supply tightness spearheaded by Saudi Arabian production cuts combined with optimism around Chinese demand to lift crude.
Brent crude futures rose 23 cents, or 0.3%, to settle at $93.93 a barrel, while U.S. West Texas Intermediate futures was up 61 cents, or 0.7%, to close at $90.77 a barrel. Both contracts traded at 10-month highs on Tuesday for the fifth consecutive session, and gained about 4% on a weekly basis.
Supply concerns continue to be a driving force for prices since Saudi Arabia and Russia this month announced an extension of their combined supply cuts of 1.3 million barrels per day to the end of this year, analysts said.
Better-than-expected industrial output and retail sales data in China also boosted oil prices last week, with the country’s economic conditions considered crucial to oil demand for the rest of this year.
Data on Friday showed Chinese oil refinery processing rose by nearly 20% from a year earlier as processors kept run rates high to capitalise on high global demand for oil products. In addition, expectations of moderating U.S. oil output have also boosted prices in recent weeks.
Asian LNG inch up as market eyes
Australia strikes, freeport
Asian spot liquefied natural gas (LNG) prices inched up last week amid supply concerns as workers at Chevron’s Australia LNG projects escalated industrial action and as feedgas intake at U.S. Freeport dropped below normal capacity.
The average LNG price for October delivery into north-east Asia rose to $13.00 per million British thermal units (mmBtu) from $12.90 in the previous week, industry sources estimated. Workers at Chevron’s Gorgon and Wheatstone in Australia, responsible for more than 5% of global supply, on Thursday escalated what had been six days limited strikes.
Until around the end of September, unions can strike for up to 24 hours a day and refuse tasks such as loading tankers. Elsewhere, Freeport LNG has cancelled four cargoes since its feedgas intake dropped.
In Europe, the disruption at Freeport and Norway’s maintenance extensions, have resulted in a generally strong week for gas prices at the Dutch TTF hub. For the week, TTF rose by 6% to $11.46 per mmBtu. In the U.S., gas futures slid about 2% on Friday on lower production reductions than previously expected and forecasts for less warm weather. For the week, prices were up about 1.5% after falling 6% last week.
— By The Al-Attiyah Foundation