Oil Prices Fall More Than 2% as Investors Skeptical of OPEC+ Cuts
Date
12/3/2023 12:06:06 AM
(MENAFN- The Al-Attiyah Foundation) Oil prices slumped more than 2% on Friday on investor skepticism about the depth of OPEC+ supply cuts and concern about sluggish global manufacturing activity. brent crude futures for February settled down $1.98 at $78.88 a barrel. WTI dropped $1.89 to $74.07 a barrel. For the week, Brent posted a decline of about 2.1%, while WTI lost more than 1.9%. OPEC+ producers agreed on Thursday to remove around 2.2 million bpd of oil from the global market in the first quarter of next year, with the total including a rollover of Saudi Arabia and Russia's 1.3 million bpd of current voluntary cuts. OPEC+, which pumps more than 40% of the world's oil, is reducing output after prices fell from about $98 a barrel in late September on concerns about the impact of sluggish economic growth on fuel demand. The cuts agreed by OPEC+ are voluntary, so there was no collective revision of OPEC+ production targets. The voluntary nature of the cuts led to some skepticism about whether or not producers would fully implement them, and also from what basis the cuts would be measured. Meanwhile, investors are keeping a watchful eye on global manufacturing activity, which remained weak during the month on poor demand, surveys showed.
Asia Spot LNG Prices Fall to 7-Week Low on Tepid Demand, Improved Supply
Asian spot liquefied natural gas (LNG) prices fell last week to a 7-week low despite cold weather, as demand remains muted and global supply conditions ease after recent maintenance and geopolitical tensions. The average LNG price for January delivery into north-east Asia fell 6% to $15.7 per million British thermal units (mmBtu), the lowest since mid-October, industry sources estimated. It's clear weather and industrial demand hasn't brought any urgent covering going in to winter which doesn't set a good precedent for a bullish outlook, analysts said. Meanwhile, global supply is improving after the end of maintenance at a Qatargas plant and at Australia's Prelude facility. This is in addition to the return of Egypt's LNG exports after a halt in the immediate period following the outbreak of conflict in Gaza. The boosts from Qatar, Egypt and Australia offer improved supply potential over coming weeks. That has helped pull near-term prices lower, despite the onset of colder weather in Europe that has increased the draw-down of underground storage reserves and helped use up the queue of floating storage cargoes that had earlier been building up around European shores.
By: The Al-Attiyah Foundation.
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