Oil
Trading activity on main oil markets was very thin during the week with the markets closed on December 25 and closing early on others. Nevertheless, markets ended the week (and nearly the year and the decade) on an optimistic note.
Brent weekly averages were the highest at $68.16/bbl since June and were the second highest of 2019 which peaked in April 2019.
WTI showed a similar pattern and ended with a weekly average of $61.72.
USA oil rig count showed a minor upward turn but the outlook for USA shale for 2020 is distinctly gloomy with a slew of bankruptcies expected with small USA producers in 2020.
Year-end sentiment was improved by an unexpected drop in USA oil inventories reported by the EIA, and also of reports from China of strong profits from Chinese industrial companies.
Looking ahead, US crude future were trading at around $60/bbl for WTI for year ahead contracts, showing that traders expect little change in 2020, but it is a decline from the 2018 start of year ahead futures contracts which showed crude at $65/bbl.
Gas
LNG markets also showed thin trading with prices continuing to be further depressed worldwide this week.
All key market indicators showed declines. The key North Asia Spot prices hit $5.10 /MMBTU but with some slight evidence that a bottom may have been reached, probably based on weather and temperature expectations.
Henry Hub and NBP prices also continued to decline.
The role of Europe as a dumping ground for excess supply has been reinforced in late December by reports that nine cargoes are expected in the UK in late December and four more in early January. The cargos are from all the major European suppliers (USA, Trinidad and Tobago and Russia).
Four more cargoes are expected to dock in Belgium and three more in the Netherlands in the same time period.
Nevertheless, several producers including Nigeria and Russia announced expansions on brownfield sites which will come on stream in the next few years.
n This article was supplied by the
Abdullah bin Hamad Al-Attiyah
International Foundation for Energy
and Sustainable Development.
from Gulf Times https://ift.tt/2FiK7A1
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