Asian spot LNG prices have pulled back to around $30 per mmBtu, but remain nearly 500% up from last year.
While the news about COVID-19 and supply/demand fundamentals remain favorable, Stratas Advisors says they see other factors that will moderate oil prices.
Carsten Fritsch, analyst at Commerzbank, said the surge in oil prices was due to a tight market, as shown by the 12-month forward curve and the premium at which the first-month futures contract is trading to the second.
OPEC and allies led by Russia, collectively known as OPEC+, have done a “remarkable” job acting as “so-called regulator of the oil market,” says Saudi Arabia energy minister Prince Abdulaziz bin Salman.
Oil and natural gas prices have soared to multiyear highs recently, sending power prices surging to record levels as widespread energy shortages engulf Asia and Europe.
This is the first major binding deal for natural gas between the U.S. and China since a long-standing trade war which brought gas trade between both countries to a temporary standstill.
A White House official said the Biden administration was closely monitoring the cost of oil and gasoline and “using every tool at our disposal to address anti-competitive practices in U.S. and global energy markets to ensure reliable and stable energy markets.”
Saudi Aramco has agreed to supply additional crude to at least three Asian buyers in November, while meeting full contractual volumes for four others, sources with knowledge of the matter said on Oct. 11.
Oil prices in the U.S. were up $2 at $81.35/bbl, the highest since late 2014. WTI crude rose 4.6% through Oct. 8.