Oil prices settled lower on Friday but rose for the second straight week as investors weighed factors such as possible supply disruptions in the Middle East and Hurricane Milton’s impact on fuel demand in Florida.
Brent crude oil futures dropped 36 cents, or 0.45%, at $79.04 a barrel. U.S. West Texas Intermediate crude futures closed 29 cents, 0.38%, lower to $75.56 per barrel. For the week however, both benchmarks rose by more than 1%. Crude benchmarks spiked so far this month after Iran launched more than 180 missiles against Israel on Oct. 1, raising the prospect of retaliation against Iranian oil facilities. Israel has yet to respond.
Weighing on prices, Hurricane Milton plowed into the Atlantic Ocean on Thursday after cutting a destructive path across Florida, killing at least 10 people and leaving millions without power. Gasoline shortages gripped the state earlier in the week as drivers stocked up ahead of the hurricane, with nearly a quarter of 7,912 gasoline stations in Florida out of fuel by Wednesday morning, but the destruction could go on to dampen fuel consumption in the hurricane’s aftermath. Florida is the third-largest gasoline consumer in the U.S., but there are no refineries in the state.
Asian spot LNG slips on tepid demand, ample supply
Asian spot liquefied natural gas (LNG) slightly slipped this week as demand remains tepid amid ample supplies. The average LNG price for November delivery into north-east Asia was at $13.00 per million British thermal units (mmBtu), industry sources estimated, down from $13.10 per mmBtu last week.
In Japan, Kansai Electric Power will shut the No.3 reactor at its Mihama nuclear power station after discovering two small holes in a pipeline, and Shikoku Electric Power shut the Ikata No. 3 reactor due to a malfunction in the equipment used to monitor fuel combustion. Nuclear reactor shutdowns could lead to an increase in LNG demand to fulfill power requirements in Japan. In Europe, Dutch benchmark TTF prices edged lower on Friday amid steady supply, but the market continues to closely watch the situation in the Middle East as geopolitical risks remain. For the week, TTF front-month contract was down 2.3% at $12.99 per mmBtu.
In the U.S., natural gas futures slid about 2% to a two-week low on Friday as power generators burned less gas after Hurricane Milton knocked out power to millions of homes and businesses in Florida. The price decline came despite a decline in output this month and forecasts for the amount of gas flowing to LNG export plants to increase once Cove Point in Maryland returns to service.
— By the Al-Attiyah Foundation