Oil posts weekly gain but remains under supply hike pressure
Oil settled higher on Friday, notching a second straight week of gains on easing U.S.-China trade tensions, although prices were held back by expectations of higher supply from Iran and OPEC+. Brent crude futures settled up 88 cents, or 1.4%, at $65.41 per barrel, while U.S. West Texas Intermediate crude futures closed 87 cents, or 1.4% higher at $62.49. The benchmarks posted a weekly rise of 1% and 2.4%, respectively. The contracts fell by more than 2% in the previous session on the prospect of an Iranian nuclear deal, which could result in an easing of sanctions that could see Iranian crude return to the global market. U.S. President Donald Trump said on Thursday the U.S. was nearing a nuclear deal with Iran, with Tehran 'sort of' agreeing to its terms. However, a source familiar with the talks said there were still issues to resolve. Investor sentiment was boosted this week by the U.S. and China, the world's two biggest oil consumers and economies, agreeing to a 90-day pause on their trade war during which both sides would sharply lower trade duties. The hefty reciprocal tariffs had raised concerns about a sharp blow to global growth and oil demand. Keeping a lid on supply additions, Kyiv and Moscow failed to agree to a ceasefire at their first direct talks in more than three years, with Russia presenting conditions that a Ukrainian source described as 'non-starters'. Meanwhile, Israel struck Yemen's ports of Hodeidah and Salif on Friday.
Asian Spot LNG prices rise slightly on US-China tariff truce
Asian spot LNG prices rose slightly for the second week running amid a slight uptick in demand as industrial sentiment improved following a 90-day tariff truce agreed by the United States and China during trade talks. The average LNG price for July delivery into north-east Asia was at $11.75 per mmBtu, up from $11.50 per mmBtu last week, industry sources estimated. In April, China, the world's largest LNG buyer, recorded its lowest LNG demand since October 2022, and has been reselling U.S.-sourced LNG cargoes to Europe due to a tariff war with the United States. A 90-day tariff truce was agreed by the United States and China during trade talks in Switzerland last weekend.
This could unblock some of the two-way trade brought to a standstill by the conflict between the world's two biggest economies. If a final deal between the two powers is agreed, it might spur economic activity in China and support an increase in gas demand. In Europe, gas prices at the Dutch TTF hub remain range- bound between 11-12 USD per mmBtu. While ample supply and subdued demand have kept prices capped, a persistently narrow Asian JKM and Europe TTF spread is prompting renewed price competition with Asia.
— By The Al-Attiyah Foundation
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