Doha: Oil settled above $79 a barrel on Friday, just shy of a three-year high reached earlier this week, on expectations that OPEC ministers will maintain a steady pace in raising supply. Brent crude rose 97 cents, or 1.2 percent, to settle at $79.28 in its fourth weekly rise. U.S. West Texas Intermediate (WTI) rose 85 cents to settle at $75.88 in a sixth week of gains.
Brent has risen over 50 percent this year and reached a three-year high of $80.75 on Tuesday. OPEC+ is slowly unwinding record output cuts made last year, although sources say it is considering doing more to boost production as the group is facing pressure from consumers such as the US and India to produce more to help reduce prices as demand has recovered faster than anticipated in some parts of the world. Oil is also finding support as a surge in natural gas prices globally prompts power producers to move away from gas.
Generators in Pakistan, Bangladesh and the Middle East have started switching fuels. US oil rigs rose seven to 428 last week, their highest since April 2020, energy services firm Baker Hughes said in its closely followed report on Friday.
Asian liquefied natural gas (LNG) prices surged to a record high last week on sustained demand from China amid a power crunch and high gas prices in Europe as the winter season begins. The average LNG price for November delivery into Northeast Asia was estimated at about $32 per metric million British thermal units (mmBtu), up nearly 20 percent from the previous week, industry sources said. Price agency S&P Global Platts said on Thursday that its Japan-Korea-Marker, which is widely used as a benchmark for spot LNG contracts, rose to $34.47 per mmBtu.
Chinese buyers are seeking more cargoes despite record prices, bidding above market rates as the winter season starts with the country’s gas inventory not full, trade sources noted. Also, US natural gas futures continued their extremely volatile week, falling over 4 percent on Friday on growing expectations the United States will have enough gas supplies for this winter, after soaring in the prior session to a seven-year high on worries the rest of the world may not have enough fuel this winter. Front-month gas futures for November delivery fell 24 cents, to settle at $5.62 per mmBtu.
