Doha, Qatar: Oil prices settled lower on Friday but recorded a second straight week of gains, garnering support from a US interest rate cut and a dip in US supply. Brent futures settled down 39 cents, or 0.52 percent, at $74.49 a barrel. US WTI crude futures settled down 3 cents, or 0.4 percent, to $71.92. Signs of a slowing economy in major commodity consumer China gave prices a ceiling, noted Al-Attiyah Foundation in its Weekly Energy Market Review.
However, for the week, both benchmarks settled up more than 4 percent. Prices have recovered after Brent fell below $69 for the first time in nearly three years on Sept. 10. Prices rose more than 1 percent on Thursday, a day after the US central bank’s decision to cut interest rates by half a percentage point. Interest rate cuts typically boost economic activity and energy demand, but some analysts are worried about weakness in the US labour market.
The Fed projected a further 50 basis points of rate cuts by the end of this year, a full percentage point of cuts next year and a further half-percentage-point reduction in 2026. Additional support for oil prices came from a decline in US crude inventories to a one-year low last week. Rising tensions in the Middle East, raising the risk of supply disruption, further boosted the oil market.
Asian spot liquefied natural gas (LNG) prices were little changed this week amid tepid demand and limited market activity with many traders attending an industry conference in the United States. The average LNG price for November delivery into north-east Asia LNG-AS was at $13.10 per million British thermal units (mmBtu), slightly down from $13.20 per mmBtu last week, industry sources estimated.
Prices are expected to remain stable in the coming week as supply continues to recover, despite seasonal cooling demand in north-east Asia, analysts said. In south and south-east Asia, additional demand has been emerging, with Indian and Thai firms among those coming to the market for near-term deliveries, although Indian demand is likely to wane on weaker power demand and late monsoon rainfall.
In Europe, the benchmark front-month contract at the Dutch TTF gas hub has broken an upwards trend and entered a more neutral phase, partly due to European inventories being well-filled, with more than one month to go of the normal filling season. In the US, natural gas futures slipped more than 1 percent on Friday, weighed down by lower demand forecasts for next week and oversupply of fuel left in storage.
