Oil Prices Settle up as Iraq Backs More Output Cuts From OPEC+
Date
11/11/2023 11:54:00 PM
(MENAFN- The Al-Attiyah Foundation) Oil prices gained about 2% on Friday as Iraq voiced support for OPEC+, the Organization of the petroleum Exporting Countries and allies including Russia, oil cuts ahead of a meeting in two weeks. Still, prices settled with weekly losses of 4%, their third straight weekly decline. Iraq's oil ministry said Baghdad is committed to the OPEC+ agreement on determining production levels. Chances Saudi Arabia will extend its output cut into the first quarter of 2024 is certainly increasing given renewed market concerns about Chinese demand and the broader macro outlook, analysts said. Weak Chinese economic data this week increased worries of faltering demand. Refiners in China, the largest buyer of crude from Saudi Arabia, the world's largest exporter, asked for less supply for December. In the U.S., energy firms cut the number of oil rigs operating for a second week in a row to the lowest since January 2022, energy services firm Baker Hughes said. The rig count points to future output. Meanwhile, U.S. consumer sentiment fell for a fourth straight month in November and households' expectations for inflation rose again. In Britain, the economy failed to grow in the third quarter but avoided recession.
Asia Spot LNG Prices Fall Amid Full Inventories, Mild Weather
Asian spot LNG prices fell last week as full inventories and warm weather helped mitigate concerns over new U.S. sanctions on Russia's Arctic LNG 2. Analysts said that this is a testament to how bearish the short-term fundamental picture is because of the recent mild weather in Asia and high gas stocks in both basins. The forecast next week in Northeast Asia looks much colder, but LNG stocks currently offer a decent buffer. The average LNG price for December delivery into north-east Asia fell 3% to $16.50 per mmBtu. An electrical incident at Chevron Australia's Gorgon gas facility has left one LNG production train producing at 80% capacity. The market will follow this situation - as it may affect supply - and the short-term weather forecast given recent warmer temperatures for the heating season. In Europe, 99.6% full storage and mild weather forecast to last through year-end leave little incentive for withdrawals until early 2024. In the U.S., natural gas futures held near a two-week low on Friday as forecasts for colder weather and record amounts of gas flowing to LNG export plants offset forecasts for mild weather over the next 10 days and record output.
By: The Al-Attiyah Foundation.
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