Doha: Oil prices settled lower yesterday, making their weekly finish flat to lower, as indications of strong Russian oil supply offset better-than-expected US economic growth data, strong middle distillate refining margins, and hopes of a rapid recovery in Chinese demand.
Brent futures settled down 81 cents at $86.66 per barrel. US crude fell $1.33 to close at $79.68. For the week, Brent dropped 1.1 percent, and the US WTI benchmark fell by 2 percent.
Oil loadings from Russia’s Baltic ports are set to rise by 50 percent this month from December as sellers try to meet strong demand in Asia and benefit from rising global energy prices, traders said.
In the US, a 4.2m barrel build this week in stocks at Cushing, the pricing hub for NYMEX oil futures, also weighed on the market.
In China, critically ill COVID-19 cases are down 72 percent from a peak early this month while daily deaths among patients have dropped by 79 percent from their top, pointing to a normalisation of the Chinese economy and boosting expectations of a recovery in oil demand.
Meanwhile, OPEC+ delegates will meet this week to review crude production levels, with sources from the oil producer group expecting no change to the current policy.
Asian spot liquefied natural gas prices fell for a sixth consecutive week due to weak trading activity during the Lunar New Year holiday in Asia and lower gas prices in Europe.
The average LNG price for March delivery into northeast Asia was $19.50 per million British thermal units (mmBtu), down $2.50, or 11.4 percent, from the previous week, industry sources estimated.
The market has continued to weaken, mainly driven by a lack of demand from Asian buyers. Japanese LNG purchases will likely remain minimal as power utilities still hold a decent stock buffer for the time of year.
However, there is some anticipation of higher spot activity from Chinese buyers following the holidays due to the cold weather and the gradual re-opening of the economy.
In Europe, gas prices remained lower on robust LNG imports, high inventories, and milder weather. The differential between European and Asian LNG prices, represented by Platts NWE and Platts JKM, is up to $3 per mmBtu, which would attract fully flexible LNG loading in the US to north Asia rather than Europe.
