Oil Price Settles Down 2%, Big Weekly Drop
(MENAFN- The Peninsula)
The Peninsula
Doha, Qatar: Oil prices settled 2% lower on Friday, with a big weekly loss after data US jobs data was weaker than expected in August, which outweighed price support from a delay to supply increases by OPEC+ producers. brent crude futures were down $1.63, or 2.24%, to $71.06 a barrel, their lowest level since Dec. 2021. US West Texas Intermediate crude futures fell $1.48, or 2.14%, to $67.67, their lowest since June 2023, noted Al-Attiyah Foundation in its Weekly energy market Review.
For the week, Brent declined 10%, while WTI dropped around 8%. US government data showed employment increased less than expected in August, but a drop in the jobless rate to 4.2% suggested an orderly labor market slowdown that may not warrant a big interest rate cut from the Federal Reserve this month.
US crude stockpiles fell by 6.9 million barrels to 418.3 million barrels last week. The US active oil rig count remained unchanged at 483 last week. Concerns around Chinese demand also kept pressuring oil prices. Signals that Libya's rival factions could be closer to an agreement to end the dispute that has halted the country's crude exports also pressured oil prices last week. Exports remained mostly shut in but some loadings have been permitted from storage.
Asian spot liquefied natural gas (LNG) prices fell last week on signals of weak economic growth in China while above-average temperatures across China, Japan and South Korea are coming to an end, which would reduce cooling demand. Poor industrial data from China put red flags on the industrial gas demand for the coming period, signalling weaker economic growth.
The average LNG price for October delivery into north-east Asia was at $13.40 per million British thermal units (mmBtu), industry sources estimated, down from $14.00 per mmBtu last week. In Europe, gas prices at the Dutch TTF hub shed much of the previous week's gains as forecasts of stronger renewables output in key European countries, especially Germany, together with adjustments to Norway's heavy late summer maintenance schedules helped to weigh on prices, analysts said.
In the US, natural gas futures edged up as the amount of gas flowing to LNG export plants rises and producers continue to curtail output.
That price gain occurred despite bearish forecasts for cooler weather over the next two weeks than previously expected. For the week, the front-month was up about 7% after gaining about 5% last week.
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