Doha: Asian spot prices for liquefied natural gas (LNG) rose last week to their highest seasonal level on record, as European buyers competed with the East for limited world supply.
The average LNG price for October delivery into Northeast Asia was estimated at about $20.10 per million British thermal units (mmBtu), up $0.20 from the previous week, industry sources said. Prices for November delivery were stretching further towards $21/mmBtu, traders said. The cost of super-chilled fuel, used for power generation, rose ten-fold since the $2/mmBtu seen last year, when the COVID-19 pandemic reduced demand.
Traders in Europe have been trying to recompose stocks ahead of the winter season, when heating consumption rises. European inventories have been under 70 percent capacity, below the 85 percent 5-year average, as the continent suffers from lower Russian imports. US natural gas futures climbed to a seven-year high earlier last week, while futures in Europe also hit all-time record. In addition, US gas futures have surged more than 25 percent since late August when Ida entered the Gulf of Mexico.
Oil rose to briefly top $73 a barrel on Friday, supported by growing signs of supply tightness in the United States as a result of Hurricane Ida and as US-China trade hopes gave riskier assets a boost. Brent crude rose to settle at $1.47, to $72.92.
The session high was $73.15 a barrel. US West Texas Intermediate (WTI) crude rose $1.58, to $69.72. Both grades posted a small gain on the week. Brent has rallied 41 percent this year on supply cuts by OPEC and some demand recovery from the pandemic. Meanwhile, oil and equity markets also got a boost from news of a call between US President Joe Biden and his Chinese counterpart Xi Jinping.
The call raised hopes for warmer relations and more global trade, analysts said. In the meanwhile, about three quarters of the US Gulf’s offshore oil production, or about 1.4 million bpd, has remained halted since late August.
The US added seven oil rigs in latest week, Baker Hughes said, indicating production may rise in coming weeks. In focus next week will be revisions to the oil demand outlook for 2022 from OPEC and the IEA.
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