Oil futures slipped slightly in thin holiday trading on Friday, as the market looked ahead to last weekend’s OPEC+ meeting and the likelihood that member countries will decide to raise output.
Brent crude futures settled down 50 cents at $68.30 a barrel while U.S. West Texas Intermediate crude was down at $67.00. Trade was sparse due to the U.S. Independence Day holiday.
Brent settled about 0.8% higher than last Friday’s close and WTI was 2.3% higher.
Eight OPEC+ countries are likely to make another oil output increase for August at a meeting on Saturday in their push to boost market share.
The meeting was moved forward a day to Saturday. If the group decides to increase its output by another 411,000 barrels per day (bpd) in August, as expected, for the fourth successive month, oil balance estimates for the second half of the year will be reassessed and will suggest accelerated swelling in global oil reserves, analysts said.
Investors were also watching for implications of U.S. President Donald Trump’s massive package of tax and spending cuts, which was set to be signed into law at a ceremony at the White House on Friday.
Crude prices also came under pressure from a report on U.S. news website Axios, which said the United States was planning to resume nuclear talks with Iran next week, while Iranian foreign minister Abbas Araqchi said Tehran remained committed to the nuclear Non-Proliferation Treaty.
Asian spot LNG prices fall on weak demand and rising supply
Asian spot liquefied natural gas (LNG) eased last week as subdued demand, rising supply and ample inventories weighed on prices, while the ceasefire between Israel and Iran reduced risk premiums. The average LNG price for August delivery into north-east Asia LNG-AS was $12.70 per million British thermal units (mmBtu), down from $13.10 per mmBtu last week, industry sources estimated.
Rising Pacific supply, high LNG inventories in China and South Korea, and weak industrial demand across China and India continued to pressure the market. The Iran–Israel ceasefire further eased geopolitical risk premiums, analysts said, adding that output from Australia, Malaysia and Nigeria has increased. In Europe, gas prices at the Dutch TTF hub settled at $11.53, up 2% from previous week. A lack of a demand catalyst in the global LNG market failed to spark strong price reactions on the week with the supply picture balancing out as increased liquefaction from the U.S. and Qatar helped to improve supply fundamentals.
With large supply hubs returning from maintenance and Asian demand still relatively on the sidelines, Europe continued to attract the brunt of cargoes as a closed arbitrage to Asia and heatwaves in the Mediterranean lured in waterborne LNG cargoes.
European prices have seen limited upside as demand in competing regions has been weak, while the EU’s less stringent storage targets have shifted supply risks to winter.
— By The Al-Attiyah Foundation
