Oil prices fell on Friday after a weaker than expected US jobs report indicated a patchy economic recovery that could mean slower fuel demand during a resurgent pandemic. Losses were capped by concerns that US supply would remain limited in the wake of Hurricane Ida, which cut production from the US Gulf of Mexico. Brent crude futures settled lower by 42 cents at $72.61 a barrel, while US West Texas Intermediate (WTI) crude futures were down 70 cents at $69.29. Both benchmark oil contracts were largely steady for the week, with US crude up 0.80%. Non-farm payrolls missed expectations with an increase of 235,000 jobs amid a softening in demand for services and persistent worker shortages as Covid-19 infections soared. Meanwhile oil and gas production in the US Gulf of Mexico remained largely halted in the aftermath of Hurricane Ida, with 1.7mn barrels, or 93%, of daily crude output suspended. Some analysts see room for further price gains after the Opec+, stuck to a plan to add 400,000 bpd to the market over the next few months.
Asian liquefied natural gas prices soared towards $20 per million British thermal units (mmBtu) last week, as supply constraints in Europe provided competition for Asian buyers. The average LNG price for October delivery into Northeast Asia was estimated at about $19.90 per mmBtu, up $2.70 from the previous week. Most buyers were choosing to remain on the sidelines, waiting for prices to drop. Asian prices have been boosted by tight supply over the past few months due to prolonged maintenance in Russia and Australia, although the situation is improving. As a result, European gas prices continue to hit fresh record highs. European TTF prices were averaging above $17 per mmBtu last week, as a statement from Gazprom on Tuesday, affirming that its exports target will not change even if Nord Stream 2 starts in 2021 heavily supported gas prices. In addition, Lower Russian supply via Mallnow and Velke Kapusany, as well as a start of Kollsnes maintenance in Norway on Thursday tightened the market further.
This article was supplied by the Abdullah bin Hamad Al-Attiyah International Foundation for Energy and Sustainable Development.
Oil slips as weak US jobs report gives a ‘reality check’