Doha: Oil prices fell on Friday as energy companies in the US Gulf of Mexico restarted production after back-to-back hurricanes in the region shut output. Brent crude futures fell 33 cents to settle at $75.34 a barrel, while US West Texas Intermediate (WTI) crude futures fell 64 cents to settle at $71.97 a barrel.
Still, both benchmarks were up for the week, with Brent up 3.3 percent and US crude up 3.2 percent, supported by tight supplies due to the hurricane outages. Friday’s slump followed five straight sessions of rises for Brent.
On Wednesday, Brent hit its highest since late July, and US crude hit its highest since early August. However, Gulf Coast crude oil exports are now flowing again after hurricanes Nicholas and Ida took out 26 million barrels of offshore production. Restarts continued over the weekend, although approximately 28 percent of US Gulf of Mexico crude output was offline at the end of last week.
Also limiting last week’s oil gains, was a climbing US dollar, making dollar-denominated crude more expensive for those using other currencies. The dollar received a boost from better-than-expected US retail sales data on Thursday.
Asian liquefied natural gas (LNG) prices rose to new seasonal highs earlier last week, on the back of record high natural gas prices in Europe, but prices tapered off slightly on Friday. The average LNG price for November delivery into Northeast Asia was estimated at about $24 to $25 per metric million British thermal units (mmBtu), up at least $3 from the previous week. Prices for cargoes delivered in October were estimated to be at $22 to $23, also up about $2 from the previous week.
Earlier in the week, a spot cargo exchanged hands at about $29 per mmBtu, with reports stating that Japan’s Tohoku Electric was the likely buyer. This is the highest priced cargo in the spot market since earlier this year.
Despite the higher prices, fundamentally, the demand is still there as utilities and other buyers need to stock up for winter. In Europe, although the previous week’s drop in gas prices weighed on Asian prices, an expensive winter is expected, as the record run in energy prices that pushed European electricity costs to multi-year highs is unlikely to continue.
