Doha: Oil settled below $40 a barrel on Friday as rising global COVID-19 cases stoked fears about lacklustre demand, and as drawn-out vote counting in the US presidential election kept markets on edge. France reported record COVID-19 cases, intensifying concerns that additional lockdowns in Europe could weigh on demand. Brent crude shed $1.48, or 3.62 percent, settling at $39.45 a barrel, while US West Texas Intermediate (WTI) dropped $1.65, or 4.25 percent to $37.14 a barrel. Still, both contracts gained on the week with Brent up 5.3 percent, and US crude rising 3.8 percent.
In the US election, Democratic presidential candidate Joe Biden took the lead over President Donald Trump in some key states over the weekend, edging closer to winning the White House as a handful of states continue to count votes. Days after polls closed, Biden has a strong lead in the state-by-state Electoral College vote that determines the winner.
Diminishing prospects of a large US stimulus package were also weighing on the market. US Senate Majority Leader Mitch McConnell said on Friday that economic statistics including a one percentage point drop in the US unemployment rate showed that Congress should enact a smaller coronavirus stimulus package that is highly targeted at the effects of the pandemic.
Providing some support to prices, the Organization of the Petroleum Exporting Countries (Opec) and allies including Russia, could delay bringing back two million barrels per day of supply in January, given weaker demand after new lockdowns. Additional support also came from a decline in US crude inventories, which plunged last week by eight million barrels, against analyst s’ expectations for an increase, official EIA data showed.
Asian spot prices for LNG fell last week on lower Chinese demand and expectations of more cargoes from the United States, although loading delays from a Malaysian export plant supported prices. The average LNG price for December delivery into North-East Asia was estimated at $6.70 per million British thermal units (mmBtu), down 80 cents from the previous week. Loadings of LNG cargoes have been delayed from Malaysia’s Bintulu plant, several sources said, although it was not immediately clear what issue the plant was facing. There are currently seven vessels waiting to load from the plant, compared with the usual three to five, data intelligence firm Kpler said, adding that only one cargo has been exported so far this week, suggesting production issues. The disruption is expected to support prices next week.
Demand was seen in Kuwait and Taiwan last week, with state-run corporations seeking cargoes for delivery over December to January. However, it was unclear if the tenders had been awarded. Gail (India) issued a tender offering two cargoes for loading from the Cove Point plant in the US and is seeking two cargoes for delivery into India, over January to February.
US natural gas futures edged down for the fifth day in a row on Friday on forecasts for milder weather next week and a mostly steady rise in output. The declines came despite this week’s increase in LNG exports to record highs. Front-month gas futures fell 1.8 percent, to settle at $2.88 per mmBtu, their lowest since 19 October That put the contract down for the fifth day in a row for the first time since April. For the week, the contract lost nearly 14 percent after rising around 64 percent during the prior six weeks.
