Oil Eases on Possible Future Angola Output Increase
Date
12/23/2023 9:27:44 PM
(MENAFN- The Al-Attiyah Foundation) Oil prices eased on Friday ahead of the long Christmas holiday weekend on expectations Angola could increase output after leaving OPEC. However, prices rose for the week on positive U.S. economic news and worries that Houthi ship attacks would boost supply costs. brent futures fell 32 cents to settle at $79.07 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 33 cents to settle at $73.56. That left both benchmarks up about 3% for the week after gaining less than 1% last week. In the Middle East, more maritime carriers said they were avoiding the Red Sea due to attacks on vessels carried out by the Houthi militant group, in response to Israel's war in Gaza. Major shippers Maersk and CMA CGM said they would impose extra charges linked to re-routing ships. In Africa, meanwhile, Angola's decision to leave the OPEC could open the way for Beijing to increase investment in the country's oil and other sectors. Angola produces about 1.1 million barrels per day of oil. In the U.S., a key inflation reading came in softer than expected, boosting investor optimism that the U.S. Federal Reserve would lower borrowing costs next year. Lesser consumer borrowing costs can boost economic growth and demand for oil.
Asia Spot LNG Prices Hit 4-month Low Despite Supply, Geopolitical Concerns
Asian spot liquefied natural gas (LNG) prices hit their lowest level in over four months this week on strong inventories and weak demand despite supply concerns as more tankers avoid the Red Sea, following attacks launched by Yemen's Houthi group on commercial ships. The average LNG price fell by 6% to $11.90 per million British thermal units (mmBtu), its lowest level since August 13, industry sources estimated. Several LNG vessels have changed their courses in recent days to avoid the Red Sea region amid maritime attacks by the Houthis on the world's main East-West trade route. In Europe, gas prices eased ahead of the Christmas holidays and as weather forecasts indicated milder temperatures will persist into January, reducing gas demand for heating and from the power sector. For the week, however, the benchmark front-month contract at the Dutch TTF hub was up by 4.7% to $11.08 per mmBtu. Meanwhile, there was minimal disruption to European gas supply from suspensions of shipment through the Red Sea, analysts at Energy Aspects said in a weekly report. In fact, it could have the opposite effect if Suez-bound U.S. LNG cargoes were to unload in Europe.
By: The Al-Attiyah Foundation.
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