(MENAFN- The Peninsula) The Peninsula
Doha: Oil fell nearly 2 percent on Friday, finishing lower for the week, in anticipation of a surge in Libyan crude supply and demand concerns caused by surging coronavirus cases in the United States and Europe. US crude settled at $39.85 a barrel, falling 1.9 percent on Friday, while Brent crude settled at $41.77 a barrel, losing 1.6 percent. For the week, US crude futures lost 2.5 percent, and Brent futures shed 2.7 percent.
Crude prices sank after Libya's National Oil Corp (NOC) said it lifted force majeure on exports from key ports and output would reach one million barrels per day in four weeks. A blockade by the eastern-based Libyan National Army (LNA) halted most Libyan crude output and exports from January until it was lifted in September, but not all fields and ports have resumed operations.
Italy did not help the markets, and several US states reported record daily increases in infections. At the same time, France extended curfews for about two-thirds of its population as the second wave of the Covid-19 pandemic sweeps across Europe. After Europe appeared to have gained a measure of control over the epidemic following the dramatic lockdowns of March and April, a new surge in cases over recent weeks has put the continent back at the heart of the crisis. The number of global COVID-19 cases has surpassed 42 million, while the deaths have soared to 1,143,290, according to the Johns Hopkins University.
Russian President Vladimir Putin on Thursday said Moscow did not rule out extending Opec+ oil output cuts. Still, that assurance did not offset the expectations for rising Libyan output and demand worries. Opec+, which includes Russia and the Organization of the Petroleum Exporting Countries, is due to increase production by two million bpd in January 2021.
Asian spot prices for LNG jumped to their highest in more than 20 months last week on robust buying appetite ahead of a colder-than-expected winter. The average LNG price for December delivery into North-East Asia was estimated at $6.90 per million British thermal units (mmBtu), jumping $1.10 from the previous week. US LNG projects in December expect no cancellations. A potential increase in cargo flows to Asia may cap price gains.
Prices were boosted by several requirements from buyers in Japan, China and South Korea. China's Unipec sought ten cargoes for delivery in winter, while Shenzhen Energy sought a cargo for December delivery. South Korea's KOGAS awarded a tender to buy at least six cargoes for delivery over November to January at just below $7 per mmBtu, while Japan's Tohoku Electric sought a cargo for delivery in late November.
US natural gas futures slipped last Friday on forecasts for demand to decline in early November. Earlier in the week, the contract closed at its highest since January 2019 on rising LNG exports and slowing output. For the week, the front-month was on track to gain about 7 percent, putting it up for a fifth week in a row for the first time since November 2018.
European gas spot prices also jumped sharply last week, spurred by concerns about unplanned Norwegian outages, while anticipation of tighter supply drove front-month contracts to new 2020 highs.
On the continent, the Dutch TTF contract closed at $5.33 per mmBtu on Friday, while the UK equivalent closed at $5.70 per mmBtu. Both contracts now sit at year-to-date highs amid expectations of steady to stronger demand in the coming weeks.
MENAFN2510202000630000ID1101013319
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.