Doha, Qatar: Oil prices rose nearly 2 percent on Friday to record a fourth consecutive weekly gain, buoyed by growing evidence of supply shortages in the coming months and rising tensions between Russia and Ukraine that could further hit supplies. Brent crude futures jumped $1.43, or 1.8 percent, to settle at $81.07 a barrel, with a weekly gain of about 1.2 percent. US West Texas Intermediate crude ended $1.42, or 1.9 percent, higher at $77.07 a barrel, its highest since April 25.
WTI gained nearly 2 percent in the week. Russia hit Ukrainian food export facilities for a fourth day in a row on Friday and practised seizing ships in the Black Sea, in an escalation of tensions in the region since Moscow’s withdrawal this week from a UN-brokered safe sea corridor agreement.
A shutdown of the grain corridor could hit supplies of ethanol and biofuels that are blended with oil products at a time that global grain markets are already tightening, which would lead to refiners using more crude oil. In the US, crude inventories fell last week, amid a jump in crude exports and higher refinery utilisation. Earlier on Monday, the EIA had forecast that US shale oil and gas production was likely to decline in August for the first time this year, adding to concerns of supply tightness.
Asian spot liquefied natural gas (LNG) prices were flat this week, as buyers continue to focus on early winter deliveries with limited need for late summer supply, while high inventories in Europe are putting pressure on prices.
The average LNG price for September delivery into northeast Asia remained stable at $10.80 per million British thermal units (mmBtu), unchanged from the previous week, industry sources estimated. Japanese storage sits at 2.10 million tonnes (MT), slightly above the five-year average, but below its level at this point in both 2021 and 2022, which could trigger consistent demand in the near future.
In Europe, hot weather demand in Europe is stymied by stable LNG and recently recovered Norwegian supplies.
Europe’s gas storage sites were 82.5 percent full, according to Gas Infrastructure Europe, meaning the bloc is well on track to meet a target to have stores 90 percent full by Nov. 1. In the US, natural gas futures fell about 2 percent on Friday as forecasts for less demand next week than previously expected offset lower daily output and hotter-than-normal weather seen through early August, especially in Texas and California.
