Tribune News Network
Doha
Oil prices settled up on Friday as hopes of stronger Chinese demand and a weakening US dollar outweighed concerns about a global economic downturn and the impact of interest rate riseson fuel use.
To fight inflation, the US Federal Reserve is trying to slow the economy and will keep raising its short-term rate target, Federal Reserve Bank of Philadelphia President Patrick Harker said on Thursday in commentsthat weighed on oil.
But crude is gaining support from a looming European Union ban on Russian oil, as well as the recent 2 million-barrels-per-day output cut agreed by the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+. Brent crude settled at $93.50 a barrel, up $1.12. US West Texas Intermediate (WTI) crude settled at $85.05 a barrel, up 54 cents. For the week, Brent was up by 2 percent, while WTI fell about0.7 percent.
Meanwhile, the dollar eased against a basket of currencies after a report said some Fed officials have signalled greater unease with big interest rate rises to fight inflation, even as they line up another big rate hike for November. The US oil rig count rose two to 612 last week, their highest since March 2020.
Asia LNG spot prices ease slightly on solid inventories
Asian spot liquefied natural gas prices eased slightly last week on solid inventories but restocking activities ahead of winter are expected to limit further declines. The average LNG price was $31 per million British thermal units last week, down $1.50, or 4.6 percent, from the previous week, industry sources estimated. In China, state-owned gas importers were instructed to stop reselling cargoes to buyers in Europe and Asia to ensure sufficient supplies for winter.
In Europe, around 35 ships carrying LNG have been drifting off the coast of Spain and around the Mediterranean due to a lack of slots to unload, exposing Europe’s lack of regasification capacity. If the backlog is not cleared soon, those ships may start looking for alternative ports outside Europe to sell their cargoes at a higher price to offset the extra shipping costs incurred by sitting offshore.
In the US, natural gas futures dropped 7 percent on Friday to a seven-month low after falling for nine weeks in a row in a move that could help cut US consumer heating costs this winter. Prices have been falling due to forecasts for mild weather, record output and low LNG exports that have allowed utilities to inject more gas into storage than usual ahead of winter.
