Brent prices are holding around 105 USD/bbl as rising Middle East tensions offset concerns about moderating demand growth.
Reports that Lebanese Hezbollah guerillas are fighting on behalf of the Assad regime are prompting alarm that the Syrian civil war may spread to other oil producing countries. Sectarian bombings in Iraq yesterday and killings in Tripoli compounded a sense of spreading regional confrontation. Western powers and Russia back opposing sides in the Syrian conflict, but agree to call a conference for negotiations to end the civil war.
Uncertainty over natural gas supplies to the UK is pushing prices higher. Maintenance and issues with Norwegian supply are creating system tightness, and the day-ahead contract closed at the highest level in a month yesterday.
Summer prices are expected to be supported by storage injections. On Friday, volumes in Rough were 850 mcm, substantially below their level of last year of 2130 mcm.
Rough storage volumes, mcm (Source: ICIS Heren/National Grid)