An oil refinery complex in southern province of Bushehr, Iran.
Doha, Qatar: Oil prices rose on Friday and settled with their biggest weekly gains in over a year on the mounting threat of a region-wide war in the Middle East, although gains were limited as US President Joe Biden discouraged Israel from targeting Iranian oil facilities, noted Al-Attiyah Foundation in its Weekly Energy Market Review.
Brent crude futures rose 43 cents to settle at $78.05 per barrel, while US West Texas Intermediate crude futures gained 67 cents to close at $74.38 per barrel. Israel has sworn to strike Iran for launching a barrage of missiles at Israel on Tuesday after Israel assassinated the leader of Iran-backed Hezbollah a week ago.
The events had oil analysts warning clients of the potential ramifications of a broader war in the Middle East. Oil prices jumped nearly 2% during the session but pulled back sharply after Biden said that if he were in Israel’s shoes he would consider alternatives to striking Iranian oil fields. On a weekly basis, Brent crude gained over 8%, the most in a week since January 2023. WTI gained 9.1% week-over-week, the most since March 2023. An attack on Iranian energy facilities would not be Israel’s preferred course of action, analysts said. Still, low levels of global oil inventories suggest that prices are set to be elevated until the conflict is resolved.
Asian spot liquefied natural gas (LNG) remained flat for a second consecutive week, with buyers staying away at the end of the cooling season and waiting for price levels to fall further. The average LNG price for November delivery into north-east Asia was at $13.10 per million British thermal units (mmBtu), industry sources estimated.
This stability is mainly due to weakened spot demand following the end of the peak summer cooling season and an increase in supply week-on-week. Analysts also noted that rising inventories in Japan saw buyers pull back from the spot market, and some were reluctant to pay above $13.10 per mmBtu. Inventories held by major Japanese utilities rose to 1.99 million tons as of Sept. 29, versus 1.63 million tons on Sept. 22. In Europe, prices at the Dutch TTF hub rose to $13.38 per mmBtu.
European gains came mostly from extensions to Norwegian upstream maintenance — and some unplanned downtime — while events in the Middle East also caused price volatility at points during the week. In the US, natural gas futures eased on Friday, snapping a five-week winning streak on weaker demand outlook even as the latest federal report showed utilities added a smaller-than-normal amount of gas into storage last week.
