Oil Prices Rise as US Closes in on Debt Deal
Date
5/27/2023 9:13:42 PM
(MENAFN- The Al-Attiyah Foundation) Oil prices ticked up on Friday as U.S. officials appeared close to striking a debt-ceiling deal, and as the market weighed conflicting messages on supply from Russia and Saudi Arabia ahead of the next OPEC+ policy meeting. brent crude settled 69 cents, or 0.9%, higher at $76.95 a barrel. U.S. WTI closed up 84 cents, or 1.2%, at $72.67 a barrel. On a weekly basis, both benchmarks posted a second week of gains with Brent climbing 1.8%, while WTI rose 1.6%. Still, markets remained cautious as debt talks may drag on and there are fresh worries about a Federal Reserve interest rate hike next month that would curb demand after strong U.S. consumer spending data and inflation readings. While it is possible negotiators will reach a deal on Friday to raise the U.S. government's $31.4 trillion debt ceiling, talks could easily spill over into the weekend, a Biden administration official said. Meanwhile, Russian Deputy Prime Minister Alexander Novak played down the prospect of further OPEC+ production cuts at its meeting in Vienna on June 4. Russia was leaning toward leaving oil production volumes unchanged because Moscow is content with current prices and output, sources with knowledge of current Russian thinking told Reuters.
Asian Spot LNG Prices Slide on Low Demand
Asian spot liquefied natural gas (LNG) prices have weakened for the fifth consecutive week on muted demand due to healthy stocks, remaining at their lowest level in two years. The average LNG price for July delivery into north-east Asia was down 3% from the previous week at $9.50 per million British thermal units (mmBtu), the lowest since early May 2021, industry sources estimated. To add to this, an Indian tender managed to break the $9.00 mark and will act as an anchor in the near term in the absence of supply disruptions or any real demand. Analysts said that prices at $9-10 per mmBtu are likely to encourage some increased buying from Asia, particularly for power generation, although spot LNG remains expensive for many industrial users. In Europe, the Dutch benchmark gas price touched its lowest level in two years on Friday, as prices across the energy complex fell in response to news Germany has slipped into recession, amid mild temperatures and healthy supply. Meanwhile, gas storage was around 66% full, versus around 44% a year ago, and with the help of milder weather, buying interest remains low. The front-month contract at the Dutch TTF settled at $7.71 per mmBtu.
By: The Al-Attiyah Foundation
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