Oil
Benchmark crude futures continued to decline for a second straight week, with a drop of more than 1.6% for both Brent and WTI. 
Demand risks outstripped other factors, fuelled by escalating trade disputes and crises in key emerging markets. The US rig count increased by seven according to the latest data; however, rig activity looks capped, which is likely to be due to evacuation constraints.
In contrast, supply factors were supportive, with the premium on reduced Iranian supply increasing. US crude stocks declined substantially by 5.3mn barrels last week, which trimmed the weekly price losses, along with a slowdown in the US crude production growth. US production forecasts were revised for both 2018 and 2019, down to 10.66mn bpd and 11.5mn bpd respectively.
After an increase in the supply risks, as explained in previous editions, demand risks are also rising with both Opec and IEA warning that a downside could be inflicted on oil demand early next year. In this context, multiple scenarios could be envisaged, and a rise in price volatility can be expected. That in turn could generate price spikes in either direction.
 
Gas
Asian spot LNG prices for November delivery reached $12 per mmbtu last week, even though the October delivery prices had declined. After several weeks of gains and a tight fundamental picture, prices were due for a correction amid a relatively low activity. 
In addition to steady demand prompted by restocking ahead of the winter season, prices also received a significant boost from relatively high oil prices, where Brent is averaging $75 a barrel for almost six months.
In the US, Henry Hub natural gas futures continued to decrease last week, prompted by a drop in cooling demand in the fall season, while the heating demand will still take some time to pick up. Like Gordon, the tropical storm Florence depressed gas demand along its path with cooler weather and power outages. Inventories, currently estimated at 18% above the five-ear average, are expected to drop to 8% by the end of October, as utilities will continue steady injections into storage. UK gas futures dropped almost 4% last week, stopping a seven-week gaining streak. 
Prices fell mostly due to a gas supply recovery, a warmer weather forecast, and a cancelled strike action planned this week on some producing oil and gas platforms in the North Sea. 


n This article was supplied by the Abdullah bin Hamad Al-Attiyah International Foundation for Energy and Sustainable Development.
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