Brent settled higher for the first time in six weeks, with prices supported by strong demand in Asia.
WTI crude closed lower for the third straight week, dropping over the past two sessions, after data showed that US gasoline demand had dropped nearly 8 percent from a year earlier in the midst of the peak summer driving season, hit by record prices at the pump.
On Friday, WTI settled $1.65, lower at $94.70 a barrel, while Brent crude fell 66 cents, to $103.20. Trading in oil futures has been volatile in recent weeks as traders try to reconcile possibilities of further interest rate hikes that could cut demand against tight supply from the loss of Russian barrels.
Meanwhile, the EU said it would allow Russian state-owned companies to ship oil to third countries under an adjustment of sanctions agreed by member states last week. Under tweaks to sanctions on Russia that came into force on Friday, payments related to purchases of Russian seaborne crude oil by EU companies would not be banned. Meanwhile, the global economy looks increasingly likely to be heading into a serious slowdown, just as central banks aggressively reverse ultra-loose monetary policy adopted during the pandemic to support growth.
Asian spot liquefied natural gas prices fell last week as concerns about a tight market eased with the resumption of Russian gas flows via Nord Stream 1 following its 10-day maintenance. The average LNG price for September delivery into Northeast Asia was estimated at $38 per million British thermal units (mmBtu), down $2.5 or 6.2%, from the previous week, industry sources said.
The competition between Europe and Asia at a time when global LNG supply is tight has recently pushed Asian LNG prices to a four-month high and close to record levels last seen in December. Meanwhile, Japanese and Korean buyers remained active in the spot market to meet summer demand as Northeast Asian countries continue to experience above average summer temperatures. Now that Russian gas is flowing again towards Germany - even if it is only at 40% - there should be some relief in the need for LNG imports in order to fill European gas inventories in time. However, European demand for LNG will remain very high during the winter months.
