Doha: Both benchmarks saw their biggest weekly percentage drops in about a month, largely on fears earlier in the week that a nearing recession would chop away at demand. Brent lost 5.5 percent in its third weekly drop, while WTI was down 6.9 percent in its second weekly decline.
However, oil gained 2.5 percent on Friday after a U.S. official told Reuters that an immediate Saudi oil output boost was not expected, and as investors question whether OPEC has the room to significantly ramp up crude production.
Brent crude futures settled at $101.16 a barrel, rising $2.06, while West Texas Intermediate crude settled at $97.59 a barrel, gaining $1.81. Meanwhile, the U.S. oil rig count, an early indicator of future output, inched up by two to 599 this week to their highest since March 2020, energy services firm Baker Hughes said.
Also signalling more oil supply on the horizon was Libya’s oil chief, who said crude output will resume after meeting groups that have blockaded the country’s oil facilities for months. Bearish market sentiment has also followed renewed COVID-19 outbreaks in China, which have hampered a demand recovery.
Meanwhile, analysts expect continued pressure on oil from concerns over the global economy.
Asian spot liquefied natural gas prices remained at high levels last week on a summer demand pickup in Asia and uncertainty over the Nord Stream 1 pipeline’s return to operations after maintenance ends on July 21.
The average LNG price for August delivery into north-east Asia was estimated at $40.50 per million British thermal units (mmBtu), down $0.50 or 1.2%, from the previous week, industry sources said.
Although China has healthy storage levels, a current heatwave across is stressing the power system and might increase LNG buying. Japan and South Korea are also expected to buy more LNG cargoes for summer, according to analysts. In Europe, British and Dutch gas prices edged lower on Friday as Norwegian exports ramped up after an outage, though concerns remain over future supply from Russia. Flows from Russia via the Nord Stream 1 pipeline remained shut because of maintenance. The maintenance is due to end on July 21 but market participants and governments fear it could be prolonged by Moscow. In US, natural gas futures jumped about 6% to a four-week high on Friday on a drop in output last week and forecasts for hotter weather and more demand over the next two weeks.
