(MENAFN- The Peninsula) The Peninsula
Doha: Oil prices fell on Friday but were set to post their biggest annual gains since at least 2016, spurred by the global economic recovery from the COVID-19 pandemic slump and producer restraint, even as infections reached record highs worldwide.
After rising for several straight days, oil prices stalled on Friday as COVID-19 cases soared to new pandemic highs across the globe, from Australia to the United States, stoked by the highly transmissible Omicron coronavirus variant. Brent crude futures settled down $1.75, or 2.2 percent, at $77.78 a barrel. US West Texas Intermediate crude futures dropped $1.78, or 2.31 percent, to $75.21 a barrel. Brent ended the year up 50.5 percent, its biggest gain since 2016, while WTI posted a 55.5 percent gain, the strongest performance for the benchmark contract since 2009, when prices soared more than 70 percent.
Global oil prices are expected to rise further next year as gasoline and diesel demand catches up. Meanwhile, with oil hovering near $80, the Organization of the Petroleum Exporting Countries and its allied producers, together called OPEC+, will probably stick to their plan to add 400,000 barrels per day of supply in February when they meet on January 4.
Asian LNG prices fell last week on muted Asian demand and a drop in European gas prices in thin holiday trading, though a bullish outlook remained on concerns over tight European supply.
The average LNG price for February delivery into Northeast Asia fell to 33.80 per mmBtu, down $14.5, or around 30 percent from the previous week. Demand in Asia stalled as buyers resisted high spot market prices that recently reached around $45 per mmBtu and favoured alternative fuels, but demand could recover in January.
European gas prices declined from all-time highs despite concerns over Russian supply with the Yamal pipeline that brings Russian gas to Germany remained in reverse direction, sending fuel back to Poland for a 10th day on Thursday. However, the arrival of several LNG gas tankers sent prices down and helped offset low exports from Russia. Concerns over low storage capacity in Europe, currently at 55 percent and the prolonged process of approval for Nord Stream 2 remain a bullish factor that should support prices.
The US gas futures on Friday closed out their biggest yearly gain in five powered mostly by strong demand for US LNG exports helped by an initial surge in global prices.
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