(MENAFN- The Peninsula)
The Peninsula
Doha: Oil prices climbed more than 2 percent on Friday, hitting the highest levels in more than a year, on hopes of US stimulus measures and fuel demand, as supplies tighten mainly due to output cuts by top producing countries. Brent crude settled up 2.1 percent, at $62.43 a barrel after rising to a session high of $62.83, the highest since 22 January 2020. US oil ended the session up 2.1 percent, at $59.47, the highest since January 9, 2020. US crude notched a weekly gain of 4.6 percent while Brent rose 5.2 percent on the week.
US President Joe Biden will meet with a bipartisan group of mayors and governors as he keeps pushing for approval of a $1.9 trillion coronavirus relief plan to bolster economic growth and help millions of unemployed workers. As a result, all three major US stock indexes were on course for their second straight weekly rise. A sharp drop in new COVID-19 cases and hospitalisations also buoyed hopes life will eventually return to normal.
Oil prices have risen over recent weeks due partly to production cuts from OPEC and allied producers in OPEC+. Still, OPEC last week ratcheted down expectations for global oil demand to recover in 2021, trimming its forecast by 110,000 barrels per day (bpd) to 5.79 million bpd. The International Energy Agency (IEA) also said oil supply was still outstripping global demand, though COVID-19 vaccines are expected to support a demand recovery.
Demand data from the world's biggest oil importer also paints a less optimistic picture. The number of people who travelled in China ahead of the Lunar New Year holiday plummeted by 70 percent from two years ago as coronavirus restrictions curbed the world's largest annual domestic migration, official data showed.
Asian spot LNG prices fell for a fourth week on lower heating demand and as markets in China and most of South-East Asia close for the Lunar New Year. The average LNG price for March delivery into North-East Asia was estimated at around $6.90 per million British thermal units (mmBtu), 30 cents lower than last week, with just one cargo changing hands during the week within the S & P Global Platts window. While sellers including Kuwait Petroleum made offers, the only confirmed cargo was sold by PetroChina to Vitol.
The deal closed at a premium of $0.60 over the European reference price, the Title Transfer Facility (TTF) in the Netherlands. The premium was attributed to low liquidity, one trader said. On Friday, March TTF futures closed at $6.32 per mmBtu in London, slightly lower than the Asian close, the price assessment agency said.
For heating, demand for LNG has fallen this week after a harsh winter in Asia that sent prices to record highs last month, with traders now booking cargoes for delivery in warmer months.
In two of the world's top LNG consuming countries, China and Japan's temperatures are expected to rise above the seasonal average in late March, when cargoes currently being booked will be delivered. US vessels, redirected to Asia amid the winter cold spell, may start flowing to Europe for storage replenishment. While Asia has limited tanking capacity, Europe has substantial underground space that can take the whole summer to fill.
US natural gas futures edged up to a one-week high on Friday, ahead of the long US Presidents Day weekend, after midday forecasts called for even colder weather over the next two weeks than previously expected. In their latest forecasts, meteorologists project average US temperatures will remain well below normal through February 21. Analysts say that arctic freeze will boost heating demand to daily record highs early next week. On Friday, front-month gas futures rose 1.5 percent to settle at $2.91 per mmBtu, their highest close since February 4.
MENAFN14022021000063011010ID1101598206
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.