Oil
Benchmark crude oil futures were still breaking records last week but demand destruction is feared as prices are getting close to $80. 
Brent and WTI recorded their sixth and third straight week of gains respectively. 
The market fundamentals support to prices is provided by the global strong demand and the Opec+ production cut deal running until the end of this year. 
These two drivers are draining global stocks as the surge in US production seems to have filled the gap only partially for the time being. 
Geopolitical tensions in the Middle East and Venezuela are also seen to impact the supply picture, intensifying further the market tightness. 
Venezuelan production fell down in April to 1.4 mbpd and is expected to get below one mbpd if the election result will lead to maintaining the outgoing President. 
The range estimate of the reduction in Iran’s supply due to the US withdrawal from the nuclear deal is wide, but in the next six weeks Iranian exports are expected to be reduced by around 0.3 – 0.5 mbpd.
However, the price upside was limited by a stronger US dollar as yields on US bonds hit a seven-year high. 
The IEA warned high oil prices would hurt consumption as it lowered its 2018 global oil demand growth forecast to 1.4 mbpd from 1.5 mbpd, arguing that energy subsidies have been cut in some emerging economies in recent years.
Many voices are emerging to ask Opec to cool prices by unleashing the production taps, mainly from US President, India’s Petroleum Minister and BP’s CEO. 
This issue will be one of the main items of the Opec meeting agenda in June. 
Though, Opec already warned that it will not change its policy based on short term spikes.
Gas 
Asian spot LNG prices surged last week by 10% mainly due to emerging demand from Asian countries and some expected reduced supply. Strength in oil and coal prices was still lending some support to spot LNG prices. 
LNG demand is emerging in some Asian countries mainly to meet the higher demand for cooling during summer and to replenish the inventories ahead of the upcoming winter season. 
Goldman Sachs is assessing that OECD gas inventories are 650 bcf below their seasonal average. 
The first LNG to be shipped from Ichthys LNG project in Australia is delayed to September, and project holders are seeking five LNG cargoes over July to September to replace LNG they will not be able to supply.
In the US, Henry Hub natural gas futures gained 1% to reach a three-month high. 
Prospects of warm weather for the next few weeks are expected to give a boost to air conditioning demand, which will limit further the gas inventory levels.
In the UK, NBP gas futures growth was also positive with another 3% weekly gain, mainly due to below normal temperatures during the week but warmer weather forecasts were expected for the coming week. 
Oil prices approaching $80 also provided some support.

* The author is senior energy researcher at Abdullah Bin Hamad Al-Attiyah International Foundation for Energy and Sustainable Development.
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