Oil settles higher despite OPEC+ production boost plan, says Al Attiyah Foundation
Doha: Oil stabilized on Friday, supported by expectations that OPEC’s decision to raise production targets by slightly more than expected will not add much to global supply which is expected tighten as China eases COVID-19 restrictions.
The Organization of the Petroleum Exporting Countries and its allies, known as Opec+, agreed on Thursday to increase production by 648,000 barrels per day (bpd) in July and August instead of 432,000 bpd as previously agreed. . The production hike could be less than the promised amount since OPEC+ has split the increase among its members and has always included Russia, whose production is falling as sanctions prompted some countries to avoid buying its oil. since the invasion of Ukraine. Brent crude rose $2.11 to settle at $119.72 a barrel. U.S. West Texas Intermediate crude rose $2 to $118.87. Both benchmarks rose $3 in after-hours trading.
Meanwhile, a US weekly inventory report showed crude inventories fell 5.1 million barrels more than expected. Gasoline stocks also fell. Demand is also rising as China’s financial hub Shanghai and capital Beijing eased COVID-19 restrictions and the Chinese government pledged to stimulate the economy.
Spot liquefied natural gas prices in Asia rose last week on continued demand growth from Japan, South Korea and India, as major utilities seek to replenish inventories. Increased competition narrowed the gap with European gas prices at TTF’s Dutch hub, where prices fell after concerns over further Russian gas cuts eased.
The average LNG price for July delivery in Northeast Asia was estimated at $24.75 per million British thermal units (mmBtu), up $1.35 from the previous week, sources said. industry sources. The market has been a little more stable recently compared to the volatility of previous months, although still at high prices, analysts said.
The market should remain in this mood in the short term, with continental Europe prices highest as storage injections continue, Asia slightly lower as COVID-19 lockdowns slow the Chinese demand, and the UK is falling again as it has demand constraints due to lack of storage capacity, they added.
Meanwhile, Russia’s Gazprom has cut gas supplies to Danish energy company Orsted and Shell Energy for its contract to supply gas to Germany, citing the companies’ non-payment in roubles.