Friday, 03 December 2021 04:00 GMT

Oil prices rise to three-year high on back of supply deficit forecasts: Al Attiyah Foundation


(MENAFN- The Peninsula) The Peninsula

Doha: Oil prices settled at a three-year high above $80 a barrel on Friday, boosted by forecasts of a supply deficit in the next few months as the easing of coronavirus-related travel restrictions spurs demand. Brent crude futures settled up at $84.86 a barrel on Friday, as front-month prices touched their highest level since October 2018, hitting a weekly rise of 3 percent, its sixth straight weekly gain. US West Texas Intermediate (WTI) crude futures rose 1.2 percent, to $82.28 a barrel. That was up 3.5 percent on the week in an eighth consecutive weekly rise. 

Demand has picked up with the recovery from the COVID-19 pandemic, with a further boost from power generators who have been turning away from expensive gas and coal to fuel oil and diesel. The White House said it will lift COVID-19 travel restrictions for fully vaccinated foreign nationals effective November 8, which should further boost jet fuel demand. Meanwhile, a sharp drop in oil stockpiles in the United States and the member countries of the Organisation of Economic Cooperation and Development is expected to keep global supply tight.

Asian liquefied natural gas (LNG) prices continued to rise last week, on the back of higher European gas prices, which fueled competition from buyers in Asia, while demand is firm from top buyer China. The average LNG price for November delivery into Northeast Asia was estimated at about $38.50 per metric million British thermal units (mmBtu), up $1.50 from the previous week. December delivery prices were estimated to be about $38.40 per mmBtu. Facing an ongoing power crunch, amid a shortage of coal for electricity generation, China has been one of the heavy buyers of LNG. 

The country's September imports of natural gas, both from pipelines and as LNG, were at a nine-month high at 10.62 million tonnes, 22.6 percent above year-ago levels. The heavy Chinese buying is reinforcing the link between Asian LNG pricing and the European TTF. TTF prices closed at $30.05 per mmBtu on Friday, with nearly a 6 percent rise on the week. Attention will continue to be focused on gas transit capacity auctions tomorrow, and what they reveal about Russia's bookings for November capacity into Europe. Russia's Deputy Prime Minister Novak said that Russia could resume spot gas sales after it finishes filling its storage reserves.

 

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