(MENAFN- The Peninsula)
The Peninsula
Doha, Qatar: Oil prices settled more than 2% lower on Friday as traders grew less fearful of prolonged supply disruptions from a hurricane in the US Gulf of Mexico, while China's latest economic-stimulus packages failed to impress some oil traders. US West Texas Intermediate futures led the decline and settled at 70.35 per barrel, down by 2.7%, or $1.98. Global benchmark brent crude futures fell by 2.3%, or $1.76, to $73.87 per barrel, noted Al-Attiyah Foundation in its Weekly energy market Review.
Energy producers shut in more than 23% of oil output in the US Gulf of Mexico by Friday to brace against Hurricane Rafael. The storm, which left a trail of destruction in Cuba this week, had weakened to a Category 2 hurricane on Friday, according to the US National Hurricane Center's latest advisory. Despite Friday's losses, oil prices gained more than 1% week-over-week, drawing support from expectations of tighter sanctions on Iran and Venezuela by US President-elect Donald Trump, which could cut oil supply to global markets.
Meanwhile, top oil importer China's latest round of fiscal support disappointed oil investors. Chinese authorities announced a package easing debt-repayment strains for local governments, but those measures do little to directly target demand, analysts said.
Deflationary pressures on the Chinese economy have been a heavy drag on oil prices this year, with customs data showing a sixth consecutive month of year-over-year declines in the country's crude oil imports for October.
The average LNG price for December delivery into north-east Asia fell to $13.40 per million British thermal units (mmBtu), down from $13.80 mmBtu last week, industry sources estimated. Temperatures in both Seoul and Shanghai are forecast to remain above-average through late December which could weigh on gas demand. Chinese LNG imports were the highest ever for October, at around 6.5 million metric tons, which could be more stocking up ahead of winter than a sign of a longer-term bullish trend.
The LNG market has generally shrugged off Trump's return to the White House but the market is closely monitoring his stance, particularly towards Joe Biden's pause on approvals to export LNG from new projects, as well as on the Middle East, China and Russia.
In Europe, gas inventories have started to decline due to colder weather and a few days of no wind and solar output, triggering some upward price pressure for prices at the Dutch TTF hub.
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