Doha: Oil prices climbed more than 1 percent on Friday after better-than-expected US employment data, though both benchmarks fell more than 3 on the week on US interest rate hike jitters. Brent rose $1.19 to $82.78 a barrel. US WTI crude was up 96 cents at $76.68. Expectations of further rate hikes in the world’s largest economy and in Europe have clouded the global growth outlook and driven both crude benchmarks down this week.
However, the US Federal Reserve may have less reason to raise interest rates as sharply or as high as some had thought after a government report on Friday rekindled hopes of easing inflation amid signs the pandemic-disrupted labour market is normalising.
Fed Chair Jerome Powell has warned of higher and potentially faster rate hikes, saying the central bank was wrong in initially thinking inflation was “transitory”. Its next monetary policy meeting is planned for March 21-22. Broader US employment data for February beat expectations with nonfarm payrolls rising by 311,000.
This is likely to ensure that the Fed will raise interest rates for longer, which would weigh on oil prices. US oil rigs fell by 2 to 590 this week, their lowest since June, according to data from Baker Hughes.
Asian Spot LNG Prices Hit 20-Month Low Asian spot liquefied natural gas (LNG) last week hit its lowest level since July 2021 on muted demand, but such low levels have incentivised the return of some Chinese players to the market, which if sustained could fuel competition with Europe. The average LNG price for April delivery into northeast Asia was $13.50 per million British thermal units (mmBtu), down $1, or 6.9 percent, from the previous week, industry sources estimated. Prices have fallen nearly 52 percent year-to-date and around 81 percent from the August 2022 peak at $70.50/mmBtu.
Analysts said that many traders continue to eye potential Chinese demand for this summer with European underground gas storage looking set to enter the injection period very well stocked.
In Europe, gas prices recouped some early-week losses due to a cold snap with snowy weather across the UK and other parts of the continent, coupled with shutdown at French LNG import terminals since March 7 due to a strike action. In the US., front-month gas futures fell about 4 percent to a two-week low on Friday on forecasts for less cold weather and lower heating demand over the next two weeks than previously expected. Natural gas price fell 11 cents to settle at $2.43 per mmBtu.
