(MENAFN- The Al-Attiyah Foundation) Oil Dives 3% on Resurgent Pandemic in Europe
Oil prices fell on Friday below $80 a barrel as surging COVID-19 cases in Europe threatened to slow the economic recovery while investors also weighed a potential release of crude reserves by major economies to cool prices. Brent was on track for its lowest close since Sept. 30 and WTI for its lowest close since Oct. 1. Both benchmarks declined for the fourth consecutive week, for the first time since March 2020. Austria became the first country in western Europe to reimpose a full coronavirus lockdown this autumn to tackle a new wave of COVID-19 infections across the region. Germany, Europe's largest economy, warned it may also have to move to a full lockdown. Meanwhile, governments from some of the world's biggest economies were looking into releasing oil from strategic petroleum reserves (SPR) following a request from the United States, for a coordinated move to cool prices. Speculation about a U.S. stock release already pushed oil prices down about $4 a barrel in recent weeks and additional supplies of up to 100 million barrels are already priced in, Goldman Sachs oil analysts said in a note. OPEC+ has stuck to its policy of gradual oil output increases even as prices surged.
LNG Prices Rise on Robust Demand Ahead of Peak Winter
Asian LNG prices rose for the second straight week on robust demand from Asian buyers ahead of peak winter months and on supply concerns in Europe after the delay in licensing the new Nord Stream 2 pipeline. The average LNG price for January delivery into Northeast Asia rose to $36.7 per mmBtu, up $5.2, or 16.5%, from the previous week, industry sources said. Analysts said that the delays to Nord Stream 2 have seen a bit of panic creep back into the market especially with the first signs of colder temperatures in Asia and with colder forecasts starting to hit the U.S. as well. On Tuesday, Germany's energy regulator suspended the approval process for Nord Stream 2, a major new pipeline bringing Russian gas into Europe, throwing up a new roadblock to the contentious project and driving up regional prices. Asia looks better prepared for winter than Europe, so far, in terms of inventories. However, a repeated cold snap could lead to a buying spree similar to that seen in January that served as the catalyst to fire up prices. Market players are also concerned that disruptions to expected deliveries due to outages in Malaysia and Australia could send Asian buyers back to the spot market.
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