Doha, Qatar: Oil prices fell on Friday and were headed for their first monthly drop since November, as markets watched an Oval Office argument between the US and Ukrainian presidents while also bracing for Washington’s new tariffs and Iraq’s decision to resume oil exports from the Kurdistan region. Brent crude futures, which expired on Friday, settled at $73.18 a barrel, down 86 cents, or 1.16%. US West Texas Intermediate crude futures finished at $69.76 a barrel, losing 59 cents, or 0.84%, noted Al-Attiyah Foundation in its Weekly Energy Market Review.
Both benchmarks are on track to post their first monthly decline in three months. WTI was strengthening late in the session until an on-camera argument in the Oval Office broke out between US President Donald Trump and Ukrainian President Volodymyr Zelenskiy over a possible cease-fire agreement in the Russia-Ukraine war. Trump on Thursday said his proposed 25% tariffs on Mexican and Canadian goods will take effect on March 4, along with an extra 10% duty on Chinese imports.
A tariff war could slow global growth, spark inflation and, in turn, suppress crude demand.
Baghdad is set to announce the resumption of oil exports from the semi-autonomous Kurdistan region through the Iraq-Turkey pipeline, according to an Iraqi oil ministry statement. Iraq will export 185,000 barrels per day through state oil marketer SOMO, and that quantity will gradually increase, the ministry said.
Asian spot LNG prices fell further last week to its lowest level in 10 weeks, tracking Europe’s bearish gas price momentum and amid weak demand due to comfortable levels of storage. The average LNG price for April delivery into north-east Asia was at $13.50 per mmBtu, down from $14.00 last week, industry sources estimated. Buyers in China or Korea are still away from the market due to relative comfortable storage levels and supply but some cold in China at the start of March might bring back some late buyers, analysts said.
Meanwhile, prices are still too high for price sensitive buyers in south-east Asia, with only a few countries active on the spot markets: Bangladesh, Thailand, Philippines. However, the drop in prices means that the level at which Asian buyers are expected to return to the market is coming closer. In Europe, prices fell most of the week amid comfortable supply and the prospect of a relaxation of European storage targets.
Discounts for summer deliveries have narrowed as increased inter-basin competition for summer deliveries has forced European buyers to bid slightly higher to secure delivered cargoes. The US arbitrage to north-east Asia via the Cape of Good Hope for February has narrowed for the fifth week, meaning that the incentive for US cargos to go to Europe instead of Asia has become much more marginal compared to the last two months.
