Doha: Brent crude futures snapped a three-day rally on Friday in light trading before the Christmas holidays, but the benchmark ended the week higher, with the market focusing on next steps by Opec+ and the impact of the Omicron variant.
Brent crude futures settled 71 cents lower at $76.14 a barrel, rising by about 3 percent on the week. US West Texas Intermediate crude futures ended up $1.03 on Thursday, at $73.79 a barrel, to rise 4.1 percent on the week. US markets were closed on Friday for the Christmas holiday.
Oil prices have recovered this week as fears over the impact of the highly infectious Omicron variant on the global economy receded, with early data suggesting it causes a milder level of illness. However, some governments are imposing tighter travel restrictions to slow the spread of the variant, which could hit demand.
Meanwhile, the Organization of the Petroleum Exporting Countries and allies including Russia, will meet on January 4 to decide whether to go ahead with a 400,000 barrels per day production increase in February. Russia believes oil prices are unlikely to change significantly next year with demand recovering to pre-pandemic levels only by the end of 2022.
Asia LNG prices jumped this week, despite tepid Asian demand, as upside risk in European gas market remains a key driver directing price movement. The average LNG price for February delivery into Northeast Asia rose to $48.30 per metric million British thermal units, up $3.95, or 8.9 percent from the previous week, industry sources said. Demand in Asia remained muted with buyers avoiding the spot market due to soaring prices and as high inventory levels among utilities in Japan and China exceed multi-year highs.
European spot gas prices hit another all-time high this week after the Yamal pipeline that normally brings Russian gas to heat homes and power electricity generation in Germany reversed direction and started to flow into Poland.
However, prices fell on Friday in thin holiday trading as warmer weather and an increased supply of liquefied natural gas to Europe offset the impact of concerns over reduced Russian supply.
US natural gas futures fell more than 6 percent on Thursday, weighed down by forecasts for milder weather and lower heating demand than previously expected and smaller-than-usual storage withdrawal last week. Most of the US markets were closed on Friday for the Christmas holiday.
