Oil futures fell about 1.5% on Friday, finishing the week lower on declining Chinese demand and hopes of a Gaza ceasefire agreement that could ease Middle East tensions and accompanying supply concerns.
Brent crude settled down $1.24, or 1.5%, at $81.13 a barrel. West Texas Intermediate crude ended $1.12, or 1.4%, lower at $77.16 a barrel. For the week, Brent was trading down more than 1% while WTI fell beyond 3%. Data released last week showing that China’s total fuel oil imports dropped 11% in the first half of 2024 have raised concern about the wider demand outlook in China. Meanwhile, demand in the United States is also expected to ease as refiners in the world’s top oil consumer are preparing to cut back production as the end of the summer driving season nears. In the Middle East, hopes of a ceasefire in Gaza have been gaining momentum.
A ceasefire has been the subject of negotiations for months, but U.S. officials believe the parties are closer than ever to an agreement for a six-week ceasefire in exchange for the release by Hamas of female, sick, elderly and wounded hostages.
Asia spot prices slip as Freeport LNG loadings
resume, Japan stocks rise
Asian spot LNG prices eased last week, amid a resumption of loading at Freeport LNG in the United States and rising inventory levels held by major Japanese utilities. The average LNG price for September delivery into north-east Asia was at $12.00 per million British thermal units (mmBtu), industry sources estimated, down from $12.20 per mmBtu last week.
Prices eased despite hot weather driving power demand in some parts of northeast Asia due to several factors including the return of loadings at the U.S. Freeport LNG plant, high gas stock levels at Japanese power utilities, and weak demand in China.
Freeport LNG’s export plant in Texas resumed shipments on Monday after shutting operations ahead of Hurricane Beryl. In Europe, the Dutch TTF gas price settled at $10.30 per mmBtu last week. A widening spread between Dutch TTF gas and Japan/Korea LNG prices implicates that demand for LNG in Asia is bigger than in Europe at the moment.
In the U.S., natural gas futures slid about 2% to a 12-week low on Friday due to rising output and a tremendous oversupply of gas in storage, with stockpiles currently about 16% above normal for this time of year.
— By the Al Attiyah Foundation
