Staff Writer
Friday saw a little increase in oil prices as the market considered conflicting supply warnings from Saudi Arabia and Russia ahead of the next OPEC+ policy meeting and as US authorities looked to be close to reaching a debt-ceiling agreement. At $76.95 a barrel, Brent crude finished 69 cents, or 0.9 percent, higher. At $72.67 per barrel, US WTI ended the day up 84 cents, or 1.2 percent.
Both benchmarks saw gains for the second consecutive week on a weekly basis, with Brent increasing by 1.8 percent and WTI increasing by 1.6 percent.
Markets remained cautious, though, as there are new concerns about a Federal Reserve interest rate hike next month that would reduce demand in the wake of good US consumer expenditure statistics and inflation readings. Debt talks may also drag on.
Although it’s probable that negotiators could strike an agreement on Friday to raise the $31.4 trillion debt ceiling for the US government, discussions may easily go into the weekend, a Biden administration source warned. At the OPEC+ meeting on June 4 in Vienna, Alexander Novak, the deputy prime minister of Russia, downplayed the likelihood of further output cutbacks. According to Reuters, people familiar with current Russian thinking said that Russia was inclined to maintain current oil production levels since Moscow is happy with the existing output and price levels.
Due to high inventories and sluggish demand, Asian spot LNG prices have fallen for five weeks running and are already at their lowest point in two years.
According to industry sources, the average LNG price for July deliveries to North East Asia was $9.50 per million British thermal units (mmBtu), a 3 percent decrease from the previous week and the lowest price since early May 2021.
Additionally, an Indian tender that broke the $9.00 barrier and will serve as an anchor in the short run in the absence of any serious supply interruptions or demand.
Analysts claimed that although spot LNG is still expensive for many, prices at $9–10 per mmBtu are expected to stimulate some increasing purchasing from Asia, notably for power generation.
Due to news that Germany had entered a recession, low temperatures, and a plentiful supply, energy costs plummeted across the board on Friday in Europe, with the Dutch benchmark gas price reaching its lowest level in two years. In the meantime, the amount of gas in storage was about 66 percent full, compared to 44 percent a year before, and thanks to the nicer weather, purchasing interest has remained low. The Dutch TTF’s front-month contract closed at $7.71 per mmBtu.
