Brent crude oil futures traded near $74.6 per barrel on Friday, poised for its sharpest weekly decline in over a month due to concerns over demand outlook and a looming surplus. Recently, the IEA lowered its demand forecasts, signaling the potential for a global glut, while OPEC cut its projections for the third consecutive month, both largely citing weaker demand from China. Additionally, China’s housing-policy briefing on Thursday fell short of expectations, exacerbating demand concerns in the world’s largest importer. Meanwhile, investors continued to assess supply risks in the Middle East, as the Israeli military confirmed on Thursday that Yahya Sinwar, a key Hamas leader and top target, was killed in combat, raising fears of regional escalation. Although Israel signaled it would avoid striking Iran's crude facilities, risks remain amid intensifying airstrikes. Also, oil prices found support from a surprise drawdown in US stockpiles.
US natural gas futures rose to $2.4/MMBtu, rebounding from a 4-week low, due to forecasts for higher demand next week and a federal report showing smaller-than-usual storage additions. US utilities added 76 billion cubic feet (bcf) of gas to storage for the week ending Oct. 11, lower than the 93 bcf added during the same week last year and the five-year average of 89 bcf. This comes as producers reduced drilling earlier this year. Despite this, gas stocks are still 4.6% above normal levels. Meteorologists expect warmer-than-normal weather through Nov. 1, though demand, including exports, for next week is now forecast higher than previously thought. Additionally, LNG feedgas hit an eight-month high at 14.3 bcfd.
Gasoline futures in the US were at the $2.05 per gallon mark, hovering close to their lowest since the start of the month as expectations of poor fuel demand in Asia offset data pointing to fresh reductions in stockpiles. This was recently underscored by ship-tracking data indicating the volume of fuel in supertankers docking in Chinese ports continued to decline. The poor energy demand outlook in China also drove the EIA to project that world oil demand will grow by less than 900,000 barrels per day in 2024 and 1 million bpd in 2025, a slowdown compared to the 2 million bpd growth seen after the pandemic. In the meantime, data from the EIA showed that gasoline stocks in the US dropped by 2.2 million barrels on the week ending October 11th.
US heating oil futures rose toward $2.19 per gallon from the month’s low point of $2.18 touched on October 16th amid evidence of reduced supplies in the US. The latest EIA report showed a 2.19 million barrel decline in oil stocks on the week ending October 11th, defying expectations of a 2.3 million barrel build. Similarly, distillate and heating oil inventories fell by 3.53 million and 0.343 million barrels, respectively. Meanwhile, investors remained cautious due to escalating Middle East tensions, with the US launching airstrikes on Iran-backed rebels in Yemen and Israel intensifying attacks in Lebanon, raising fears of retaliation. However, disappointing measures to support housing from the Chinese government capped energy price recovery on demand concerns.
