Oil
Benchmark crude futures rallied substantially last week, erasing the decline of the three previous weeks. A perceived tighter global supply helped prices to move to positive growth territory, as the market is still watching contradicting developments about trade disputes, especially between the US and China. 
A weaker US dollar also gave support. US crude oil stocks fell in the latest week by almost 6mn barrels, larger than market expectations. US sanctions on Iran are starting to have an impact, with US bank Jefferies indicating that in the first half of August Iranian crude tanker loadings dropped by 0.7 mbpd, while energy consultant FGE considers that Iran’s crude and condensate exports can fall below one mpbd in mid-2019. However, the extent of how some Opec members and Russia will compensate that decline is still uncertain, with the US also offering 11mn barrels of crude from its strategic petroleum reserve to the market for October and November delivery.
The US oil rig count decreased by nine, the highest weekly reduction in more than two years, but it is still about 100 rigs above last year’s level. 
A Chinese delegation arrived in Washington last week to try to resolve the ongoing trade dispute. Economists hope for a de-escalation rather than an escalation, as for instance China’s Unipec is expected to resume US crude oil purchases in October. Meanwhile, Moody’s investor service indicated that the trade war between China and US will reduce GDP growth for both countries in 2019 by 0.3-0.5% and 0.25% respectively. 
Gas 
Asian spot LNG prices continued to rise for the fifth straight week. Prices were supported by a steady demand coming especially from new buyers and by tight supplies due to summer maintenance plans and some plant outages. However, existing buyers are slowing down their purchases, as the summer season is ending and many of them replenished their inventories until next October. 
Bangladesh started last week operations of its first floating storage and regasification unit, and the second one is expected next March to reach an import capacity of 8.6 mtpa. In Thailand, Electricity Generating Authority of Thailand is seeking to import LNG for the first time and is interested in a volume of up to 1.5 mtpa via existing Map Ta Phut receiving terminal.  LNG supply is seen tightened by maintenance plans at Wheatstone LNG plant in Australia, while an outage at Russia’s Sakhalin 2 plant caused by a compressor malfunction is not thought to cause a significant impact on the exports from the plant.
In the US, Henry Hub natural gas futures recorded their first weekly decline after five weeks of gains. Production is remaining at record levels and demand from gas fired power plants is getting lower due to maintenance. 
Daily output reached a new all-time high of 83.3 bcfd on August 20, which is offsetting the impact of low inventory levels. In the UK, gas futures rose by another weekly 5% marking a fifth straight weekly gain. Prices were mainly supported by the strike action in the North Sea and lower flows from Norway due to Kollsnes plant maintenance. 
A preliminary governmental Dutch plan showed that Groningen production cap will be below 20 bcm next year. 
n This article was supplied by the Abdullah bin Hamad Al-Attiyah International Foundation for Energy and Sustainable Development.