Our market view - week 35
Brent has risen in the past two weeks on tighter supply due to disrupted output, spanning from the North Sea to Libya, while positive economic data from the euro zone and China last week improved the outlook for fuel demand. Unrest in Syria and Egypt drives up fears over oil supply security in the Middle East – which supplies more than a third of the world’s oil. Egypt has seen its bloodiest civil unrest in 60 years, while the attack in Syria added to concerns of spreading unrest that could disrupt Middle East supply. Libya’s oil production has been crippled by violence and strikes pushing exports to the lowest level since the 2011 civil war. Bomb attacks have halted oil flow in Iraq.
Peak Norwegian maintenance season ends with supply/demand balances loosening. Possible risks ahead for winter remain. European LNG imports have fallen to the 2003 level due to improved pipeline contract prices and sizeable arbitrage opportunities in diverting LNG to markets in South America and Asia.