The Vladimir Vize gas carrier is loaded with liquefied natural gas in Sabetta, Russia.
Doha: Oil prices rebounded slightly on Friday on expectations that Opec+ will discuss output cuts at a meeting on September 5. However, concerns over China’s COVID-19 curbs and weakness in the global economy loomed over the market. Brent crude futures settled at $93.02 a barrel, while US West Texas Intermediate (WTI) crude futures settled at $86.87. Both benchmarks posted a weekly drop of 7.9 percent, and 6.7 percent respectively.
Weekly charts show a bearish market with US crude futures surpassing last week’s high, only to retreat and close below last week’s closing level. Opec+ are due to meet on September 5 against a backdrop of expected declines in demand, though top producer Saudi Arabia says supply remains tight. Sources believe that Opec+ is likely to keep output quotas unchanged for October, although some sources would not rule out a production cut to bolster prices that have slid from the sky-high levels hit earlier this year.
Meanwhile, Iran said it has sent a “constructive” response to US proposals aimed at reviving Tehran’s nuclear deal, although Washington gave a less positive assessment. The news made some investors skeptical that a deal was imminent, which gave oil some support.
Asian spot liquefied natural gas (LNG) prices fell last week on comfortable supply position in the short term and as concerns over curtailed supply in Europe have eased with an expected resumption of flows via Nord Stream 1 pipeline. The average LNG price for October delivery into north-east Asia was estimated at $54.5 per million British thermal units (mmBtu), down $16, or 22.7 percent, from the previous week.
Nord Stream 1, which runs under the Baltic Sea to supply Germany and other European states, was running at 20 percent capacity even before flows were halted for three days this week for maintenance. Deliveries are due to resume over the weekend, however, Russia said on Friday gas deliveries via Nord Stream 1 pipeline remained at risk because just one turbine was operational, deepening European concerns as it struggles to secure enough fuel for winter.
European gas storages were 80.35 percent full as of August 31, according to Gas Infrastructure Europe data. As European demand remains high for US LNG, exports continue to soar. US internal natural gas futures, however, slipped on Friday to their worst week in two months, on forecasts for easing demand, as the weather is expected to turn less hot.
