Doha, Qatar: Oil prices slumped more than 2% on Friday on investor skepticism about the depth of OPEC+ supply cuts and concern about sluggish global manufacturing activity.
Brent crude futures settled down $1.98 at $78.88 a barrel. WTI dropped $1.89 to $74.07 a barrel. For the week, Brent posted a decline of about 2.1%, while WTI lost more than
1.9%.
OPEC+ producers agreed on Thursday to remove around 2.2 million bpd of oil from the global market in the first quarter of next year, with the total including a rollover of Saudi Arabia and Russia’s 1.3 million bpd of current voluntary cuts. OPEC+, which pumps more than 40% of the world’s oil, is reducing output after prices fell from about $98 a barrel in late September on concerns about the impact of sluggish economic growth on fuel demand. The cuts agreed by OPEC+ are voluntary, so there was no collective revision of OPEC+ production targets.
The voluntary nature of the cuts led to some skepticism about whether or not producers would fully implement them, and also from what basis the cuts would be measured. Meanwhile, investors are keeping a watchful eye on global manufacturing activity, which remained weak during the month on poor demand, surveys showed.
Asian spot liquefied natural gas (LNG) prices fell last week to a 7-week low despite cold weather, as demand remains muted and global supply conditions ease after recent maintenance and geopolitical tensions.
The average LNG price for January delivery into north-east Asia fell 6% to $15.7 per million British thermal units (mmBtu), the lowest since mid-October, industry sources estimated.
It’s clear weather and industrial demand hasn’t brought any urgent covering going in to winter which doesn’t set a good precedent for a bullish outlook, analysts said.
