Oil Gains as Supply Concerns Loom After OPEC+ Plan
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Oil Gains as Supply Concerns Loom After OPEC+ Plan

By the Al Attiyah Foundation

Oil Gains as Supply Concerns Loom After OPEC+ Plan

Crude prices settled higher on Friday fueled by renewed supply concerns after OPEC+ producers rebuffed a U.S. call to accelerate output increases even as demand nears pre-pandemic levels. Brent crude rose $2.20 to settle at $82.74 per barrel, while U.S. West Texas Intermediate crude (WTI) gained $2.46 to $81.27. Brent fell for a second straight week, slipping about 2%, while WTI shed 2.7%. "While factors such as a very cold winter - which may drive the use of more oil for heating - could be supportive for prices, it will be tough for Brent to break above the $87 mark," said Ann-Louise Hittle, VP, oils research at Wood Mackenzie. OPEC+ agreed on Thursday to stick to their plan to raise oil output by 400,000 barrels per day from December. U.S. President Joe Biden had called for extra output to cool rising prices. The White House said it would consider all tools at its disposal to guarantee affordable energy, including the possibility of releasing oil from strategic petroleum reserves (SPR). Sentiment also gained from data showing U.S. employment rising more than expected in October. In the meanwhile, U.S. oil rigs rose six to 450 last week, their highest since April 2020.

Benchmark Crude Prices

LNG Prices Slip below $30 as Supply Improves In Europe

Asia liquefied natural gas (LNG) prices fell for a third straight week, as improved gas supply in Europe reduced the competition for LNG in Asia, though losses were limited by fresh demand from Pakistan and Turkey. The average LNG price for December delivery into Northeast Asia fell to $29.50 per metric million British thermal units (mmBtu), down about 5% from the previous week, industry sources said. European wholesale gas prices also fell last week after flows from Russia through the Yamal pipeline resumed after a five-day pause. However, spot demand continues to be firm with some Chinese buyers scouting the market for cargoes for delivery in winter, a buyer said. Temperatures are expected to fall below normal in Seoul, Beijing, and Shanghai over the next two weeks which could also boost demand for the super-chilled fuel further. U.S. natural gas futures fell about 4% on Friday on near-record output and expectations U.S. utilities will keep stockpiling gas for a couple of more weeks. That price decline came despite forecasts for seasonally colder weather expected to boost heating demand in mid-November. Front-month gas futures fell 3.5%, to settle at $5.52 per mmBtu.

Benchmark Gas Prices

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