Doha: For the week, Brent lost 1.3%, while WTI rose 0.8%. For June, both benchmarks had ended the month lower for the first time since November.
However, oil prices gained more than 2% on Friday as supply outages in Libya and expected shutdowns in Norway outweighed expectations that an economic slowdown could dent demand. Brent crude futures settled at $111.63 a barrel, while West Texas Intermediate crude (WTI) settled at $108.43 a barrel. Industry data showed that the US manufacturing activity slowed more than expected last month, adding to evidence that the country’s economy was cooling as the Federal Reserve tightens monetary policy. Still, low crude and fuel supplies supported the oil market even as equities slumped and the US dollar, which typically has an inverse relationship with crude, rose. A planned strike among Norwegian oil and gas workers on July 5 could further pressure supply and cut the country’s overall output by up to 8%. Libya’s production has also seen a sharp decline, with the National Oil Corporation declaring force majeure at two of its major ports. No additional supply will come from the OPEC+ producers, who agreed to stick to its output strategy after two days of meetings last week.
Asian spot LNG prices continued to rise last week amid stronger demand on the back of a blistering heatwave in Japan and a return of competition with Europe which is gearing up for possible disruption of Russian gas. The average LNG price for August delivery into north-east Asia was estimated at $39 per million British thermal units (mmBtu), up $2 or 5.4% from the previous week.
In the US natural gas futures dropped nearly 8% last week to a three-month low as the shutdown of Freeport LNG export plant in Texas allowed utilities to stockpile more fuel than expected even as hotter weather had generators burning more gas to keep air conditioners humming. The market extended earlier storage-related losses after safety regulators suggest that Freeport will not restart as early as previously announced.
For the month, the contract fell about 33% in June, its biggest monthly decline since dropping 36% in December 2018. US futures lag far behind Asian and European prices because the US is the world’s top producer, with all the gas it needs for domestic use, while capacity constraints limit LNG exports. Gas is trading above $40 per mmBtu in Europe, with the Dutch TTF closing at $44.93 per mmBtu last week.
