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Oil Gains 1% on Hopes of Firmer Demand in the US and China
Oil prices settled about 1% higher on Friday, with global benchmark Brent crude recording its first weekly gain in three weeks, after economic indicators from the world's top two oil consumers - China and the U.S. - bolstered hopes for higher demand. Brent settled 71 cents higher at $83.98 a barrel. U.S. WTI gained 83 cents to $80.06. For the week, Brent gained about 1%, while WTI rose 2%. China's industrial output rose 6.7% year-on-year in April as a recovery in its manufacturing sector gathered pace, pointing to possibly stronger demand to come. China also announced major steps to stabilise its crisis-hit property sector. The Chinese figures showed potential for demand construction and supported oil prices, analysts said. Recent U.S. economic indicators have fed into the optimism over global demand for oil. U.S. consumer prices rose less than expected in April, data showed on Wednesday, boosting expectations of lower interest rates. Meanwhile, declines in oil and refined product inventories at global trading hubs have also created optimism about demand, reversing a trend of rising stockpiles that had weighed heavily on crude oil prices in previous weeks.
Asia Spot LNG Price Edges Up as Hot Weather Spurs Demand
Asian spot liquefied natural gas (LNG) prices rose last week to its highest levels since January, as hot weather across the region spurred more demand for the super-chilled fuel, and as it tracked gains in European gas prices on the back of maintenance outages and lower wind output. The average LNG price for July delivery into north-east Asia rose to $10.90 per mmBtu, up from $10.50 per mmBtu in the previous week, industry sources estimated. Utilities in India are also expected to seek additional spot LNG volumes to be delivered in June and July due to an ongoing heatwave. Additionally, the market appeared to shrug off a power outage at the Bintulu LNG complex owned by Malaysia's Petronas, with the facility appearing to continue some loadings ahead of the issue's resolution. In Europe, gas prices are seen holding steady for the upcoming week, pressured by above-average temperatures and stable pipeline flows, but supported by renewable power generation uncertainties and reduced feedgas flows at U.S. Sabine Pass LNG facilities. For the week, U.S. gas futures were up 16.6% after gaining 5% last week and a record 33% two weeks ago.
By: The Al-Attiyah Foundation