Each week, Al Attiyah Foundation publishes its energy market review, bringing you the latest global news from the oil, gas and petrochemicals sector.
Oil Rallies to USD73 on Tight US Supplies Due to Ida, Biden-Xi
Oil rose to briefly top USD73 a barrel on Friday, supported by growing signs of supply tightness in the United States as a result of Hurricane Ida and as US-China trade hopes gave riskier assets a boost. Brent crude rose to settle at USD1.47, to USD72.92. The session high was USD73.15 a barrel. US West Texas Intermediate (WTI) crude rose USD1.58, to USD69.72. Both grades posted a small gain on the week. Brent has rallied 41% this year on supply cuts by OPEC and some demand recovery from the pandemic. Meanwhile, oil and equity markets also got a boost from news of a call between US President Joe Biden and his Chinese counterpart Xi Jinping. The call raised hopes for warmer relations and more global trade, analysts said. In the meanwhile, about three-quarters of the US Gulf’s offshore oil production, or about 1.4 million bpd, has remained halted since late August. The US added seven oil rigs in the latest week, Baker Hughes said, indicating production may rise in the coming weeks. In focus next week will be revisions to the oil demand outlook for 2022 from OPEC and the IEA.
LNG-Asian Spot Prices Hit All-Time Seasonal High
Asian spot prices for liquefied natural gas (LNG) rose last week to their highest seasonal level on record, as European buyers competed with the East for limited world supply. The average LNG price for October delivery into Northeast Asia was estimated at about USD20.10 per million British thermal units (mmBtu), up USD0.20 from the previous week, industry sources said. Prices for November delivery were stretching further towards USD21/mmBtu, traders said. The cost of super-chilled fuel, used for power generation, rose ten-fold since the USD2/mmBtu seen last year when the COVID-19 pandemic reduced demand. Traders in Europe have been trying to recompose stocks ahead of the winter season when heating consumption rises. European inventories have been under 70% capacity, below the 85% 5-year average, as the continent suffers from lower Russian imports. US natural gas futures climbed to a seven-year high earlier last week, while futures in Europe also hit all-time record. In addition, US gas futures have surged more than 25% since late August when Ida entered the Gulf of Mexico.
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