(MENAFN - The Peninsula)
Oil settled modestly lower on Friday but secured a weekly gain on a stronger demand outlook and signs of economic recovery in China and the United States, that offset concerns about rising COVID-19 infections in other major economies.
Brent crude settled down 17 cents, or 0.3 percent, at $66.77 a barrel. The global benchmark finished up 6 percent on the week after rising in the previous four sessions. US West Texas Intermediate (WTI) crude settled at $63.13, also gaining over 6 percent on the week.
China's first-quarter gross domestic product jumped 18.3 percent year on year, official data showed last week. The US also saw a large increase in retail sales and a drop in unemployment claims released on Thursday.
Many analysts feel that the strong economic data, spurred by the Biden $1,400 stimulus check, is a huge positive development for the energy sector. Also announced last week, was both the International Energy Agency and OPEC's increase in their forecasts for oil demand growth for 2021, citing the stronger-than-expected rebound in activity in certain economies.
Their forecasts were also supported by Wednesday's government data that showed overall U.S. crude inventories fell by 5.9 million barrels as refining activity picked up.
Still, not all economies are recovering, as India's coronavirus infection rate hit new records last week, while Germany's Chancellor on Friday said a third wave of the virus had the country in its grip. Oil has recovered from pandemic-induced lows last year, helped by record cuts to oil output by OPEC and its allies, a group known as OPEC+.
However, some of the OPEC+ cuts will be eased starting in May, and the group meets on April 28 to consider further tweaks to the supply pact. Asian spot prices for liquefied natural gas (LNG) rose last week as China, Japan and South Korea sought supply in an early move to stock up for winter.
The average LNG price for June delivery into Northeast Asia was estimated at about $7.60 per million British thermal units (mmBtu). Last week, cargoes for May delivery were about $7.30 per mmBtu.
A colder than average winter in the northern hemisphere and shipping congestion at the Suez canal, the fastest route between Asia and Europe, have boosted prices since December.
Much of the demand last week was seen in China, with Distributor ENN Energy Holdings Ltd. purchasing at least 12 cargoes for delivery between July and February.
There was also increased purchasing activity in the far east, with Japan Petroleum Exploration was seeking a cargo for delivery between May 22 and June 13 to the Soma terminal, while South Korea's imports of LNG have rose 18.7 percent from a year earlier.
Pavilion Energy said on Thursday it had imported Singapore's first carbon neutral LNG cargo. Carbon neutral LNG typically involves companies supporting projects that reduce emissions to compensate for emissions generated from exploration and production.
The company declined to give further details on the cargo including about its supplier, however, Pavilion signed a long-term contract with Qatar Petroleum late last year requesting the cargoes be accompanied by statements of greenhouse gas emissions (GHG) measured from wellhead to discharge port.
Europe is also storing up gas as a cold spell sustained heating demand and slowed stock replenishment, which are below historical levels for this time of the year.
As a result, European TTF prices rose $0.60 last week, closing at $7.25 on Friday. US Gas prices also saw a steady increase last week, as planned work on several facilities and the pipelines serving them, including Cheniere Energy Inc's Corpus Christi facility in Texas and Cameron LNG's plant in Louisiana, supported prices.
Henry Hub prices closed up nearly 6 percent on the weekly, closing at $2.68 on Friday.
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