U.S. light crude oil gained more than 2% a barrel on Friday after comments by U.S. Federal Reserve Chair Jerome Powell indicated the central bank was preparing to cut interest rates. Brent crude futures settled up by $1.80, or 2.33%, at $79.02 a barrel.
U.S. West Texas Intermediate (WTI) crude futures finished up $1.82, or 2.49%, at $74.83. last week, both benchmarks hit their lowest since early January, after the U.S. government sharply lowered its estimate of jobs employers added this year through March, raising fears of a possible recession.
On Friday, Powell endorsed easing the Fed’s policies, saying further cooling in the job market would be unwelcome. He also expressed confidence inflation was within reach of the U.S. central bank’s 2% target.
The U.S. dollar index softened to about 101.45 ahead of the speech. A cheaper greenback typically lifts demand for dollar-denominated oil from investors holding other currencies. Recent data from China, the top oil importer, has pointed to a struggling economy and slowing oil demand from refiners. A renewed push for a ceasefire in Gaza between Israel and Hamas has also helped ease supply worries and weighed on oil prices.
Asia spot prices ease from 8-month top on weaker demand
Asian spot LNG prices eased last week from a more than eight-month top on the back of easing spot demand and as European gas prices also fell. The average LNG price for October delivery into north-east Asia was at $13.80 per mmBtu, industry sources estimated, down from $14.10 per mmBtu last week.Despite hot weather in east Asia driving up
gas consumption for power demand, the higher prices
limited buying from some importers in the region. Asian
LNG prices could continue to drop next week as well, analyst said.
The price declines come despite supply disruptions from one of the two trains at Australia’s Ichthys LNG plant in Darwin last week, its second outage in the past month. Europe gas prices eased on Friday amid cooler temperatures and weak renewables generation. Temperatures across Europe are also seen dropping this weekend, adding that strong renewable power generation is likely to reduce the need for gas-fired power.
U.S. natural gas futures slid about 2% to a two-week low on Friday on forecasts for lower demand last week than previously expected. Analysts also noted that the oversupply of gas in storage has kept a lid on gas prices all year.
— By the Al-Attiyah Foundation
