Brent prices moved higher last week on increased tension between Turkey and Syria, despite the worsening outlook for demand growth. In the latest development, Turkey has banned all Syrian aircraft from its air space.
A Reuters poll shows China’s annual growth slowing for a seventh straight quarter. Economic growth is projected at 7.4%, the weakest level since the financial crisis and below the government’s growth target.
IEA cut its demand growth forecast for the next few years, saying ample supply from North America and Iraq, coupled with declining global demand could ease prices over the next five years. Sluggish economic growth and increasing energy efficiency will affect global oil consumption. Even China, the main engine of demand growth in the last decade, is showing signs of slowing down.
UK gas prices moved higher last week as Norwegian outages triggered concerns over UK winter supply security. Prices were rising in response to news of another production failure at the Norwegian Nyhamna gas processing plant, the second such incident in a week. In addition, there was an unplanned outage at the Troll field Friday. Anticipated low LNG supplies and an increase of outages at key Norwegian supply sites justify an increase of the risk premium in gas prices.