A single oil pumpjack on the plains of west Texas on a sunny day.
Doha, Qatar: Oil prices settled higher on Friday as geopolitical tensions in the Middle East more than offset a forecast from the International Energy Agency for slowing demand. Brent crude futures settled up 61 cents, or 0.74% at $83.47 a barrel. US West Texas Intermediate crude closed $1.16, or 1.49%, higher at $79.19 a barrel.
For the week, Brent gained more than 1% and the US benchmark rose about 3%. The growing risk of a wider conflict in the Middle East supported crude prices. Gaza’s largest functioning hospital was under siege in Israel’s war on Gaza, as warplanes struck Rafah, the last refuge for Palestinians in the enclave, officials said.
On Thursday, Hezbollah said it fired dozens of rockets at a northern Israeli town in a “preliminary response” to the killing of 10 civilians in southern Lebanon, the deadliest day for Lebanese civilians in four months of cross-border hostilities. Threats persisted in the Red Sea after a missile fired from Yemen struck an India-bound tanker carrying crude oil. In the US, producer prices increased more than expected in January amid strong gains in the costs of services, which could amplify inflation worries.
Still, a slump in retail sales raise hopes the Fed will start cutting rates, supporting oil demand.
Asian spot liquefied natural gas (LNG) prices slipped to a near three-year low last week, as inventories in Europe remain at healthy levels and buying activity in northeast Asia was subdued due to the Lunar New Year holidays. Industry sources estimated that the average LNG price eased $0.70, or 7.4%, last week to $8.80 per mmBtu, its lowest levels since end-April 2021.
Asia spot prices have halved since mid-October, pressured by high stockpiles and tepid demand in Europe and northeast Asia.
A mixed weather outlook is forecast in the coming days, with a cold wave expected in China but milder weather seen for Japan and South Korea. Colder weather could increase power demand for heating purposes, leading to more usage of the super-chilled
fuel.
Prices in both basins slipped last week, largely following European gas prices lower again as continued scope for mild late winter weather, particularly the weak potential for extreme weather events, has suggested limited late season heating demand. Aggregate EU underground gas inventories are back higher than a year earlier, as the recent mild weather has curbed withdrawals, with the region set to end this winter with at least near-record stocks, providing that weather remains mild.
