Oil Settles 1% Lower as Mideast Ceasefire Talks Ease Supply Disruption Concerns
(MENAFN- The Al-Attiyah Foundation) Oil prices settled lower on Friday as the rising possibility of a ceasefire deal in Gaza outweighed strong summer fuel demand and potential supply disruptions from Gulf of Mexico hurricanes. brent crude futures settled down 89 cents, or 1.02% lower, to $86.54 a barrel, after reaching their highest since April earlier in the session. U.S. West Texas Intermediate (WTI) crude futures settled at $83.16 a barrel, down 72 cents, or 0.9%. For the week, Brent rose 0.2%, while WTI futures posted a 2% rise. The head of Israel's Mossad has returned from Doha after an initial meeting with mediators trying to reach a Gaza ceasefire and hostage release deal, and negotiations will resume this week. Meanwhile, the possibility that U.S. interest rate cuts are approaching, which raised expectations for an increase in oil demand. U.S. job growth slowed marginally in June, but a rise in the unemployment rate to more than a 2-1/2 year high of 4.1% and moderation in wage gains pointed to an easing of labor market conditions and could put a rate cut at the July meeting in their sights. A lower interest rates can boost economic activity and increase crude oil demand.
Asia Spot Prices Decline on Waning Chinese Demand
Asian spot liquefied natural gas (LNG) prices were down this week but remained firm above $12, causing Chinese demand to dip, whereas European prices fell but at a lower pace amid strong inventories and softer demand. The average LNG price for August delivery into north-east Asia was at $12.20 per million British thermal units (mmBtu), down from $12.50 per mmBtu in the previous week, industry sources estimated. The LNG market is reasonably comfortable, however; prices remain firm, which has led to a dip in Chinese demand. And Hurricane Beryl has reminded the market there are still risks ahead, analysts said. many end-users in Asia are stepping back from the market after higher prices have weighed on some demand and limited scope for stronger power cooling demand over the coming several weeks, they added. In Europe, gas prices have eased in recent days amid a drop in demand on the back of higher solar and hydro power generation. In the U.S., natural gas futures slipped over 4% to a seven-week low on Friday, as rising output and ample gas supply in storage outweighed support from forecasts for higher demand over the next two weeks.
By: The Al-Attiyah Foundation.
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