Al-Attiyah Foundation – Weekly Energy Market Review
(MENAFN- The Al-Attiyah Foundation) Oil prices drop, attention shifts to OPEC + ‘s next move
Brent crude futures recorded a three-day rally on Friday in light trading ahead of the Christmas holidays, but the benchmark ended the week higher as the market focused on the next steps in the market. OPEC + and the impact of the Omicron variant. Brent crude futures fell 71 cents to $ 76.14 a barrel, up about 3% on the week. US West Texas Intermediate crude futures closed Thursday at $ 1.03, at $ 73.79 a barrel, up 4.1% for the week. American markets are closed on Fridays for the Christmas holidays. Oil prices rallied this week as fears about the impact of the highly infectious variant of Omicron on the global economy faded, with early data suggesting it is causing milder disease levels. However, some governments are imposing stricter travel restrictions to slow the spread of the variant, which could affect demand. Meanwhile, the Organization of the Petroleum Exporting Countries and its allies, including Russia, will meet on January 4 to decide whether to proceed with a production increase of 400,000 barrels per day in February. Russia believes oil prices are unlikely to change significantly next year, with demand only returning to pre-pandemic levels by the end of 2022.
Asian LNG prices rise due to upside risk in the European market
LNG prices in Asia jumped this week, despite lukewarm demand from Asia, as upside risk in the European gas market remains one of the main drivers of price developments. The average LNG price for February delivery in Northeast Asia reached $ 48.30 per million UK thermal units, up $ 3.95, or 8.9%, from the previous week, industry sources said. Demand in Asia remained subdued, with buyers avoiding the spot market amid soaring prices and high utility inventory levels in Japan and China surpass multi-year highs. Spot gas prices in Europe hit a new record this week after the Yamal pipeline that normally carries Russian gas to heat homes and power electricity production in Germany reversed direction and began to flow to the Poland. However, prices fell over the Christmas holidays on Friday, as warmer weather and increased supply of liquefied natural gas in Europe offsets the impact of concerns over the reduction in Russian supply. U.S. natural gas futures fell more than 6% on Thursday, weighed down by forecasts of milder weather and weaker-than-expected heating demand and smaller-than-expected storage pullback usual last week. Most US markets were closed Friday for the Christmas holidays.
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