With the next OPEC+ meeting taking place this Sunday and the U.S. debt ceiling saga set to draw a conclusion around the same time, oil markets are sure to be on edge all week, Oilprice.com said.
News of the tentative McCarthy-Biden deal had provided some comfort for oil prices but not enough them from falling on Tuesday morning. Mostly, the decline was due to re-emerging skepticism that the debt ceiling deal might still be derailed during congressional hearings. The bipartisan deal to raise the $31.4 trillion debt ceiling will face its first test in Congress today and votes will likely continue through the week. With OPEC+ sending mixed signals before its meeting this Sunday, oil markets continue to be on edge.
The price of liquefied natural gas in Asia has dipped below fuel oil in mmBtu, prompting many developing nations to start purchasing LNG as Asian spot prices continue their decline, currently standing at $9 per mmBtu. Having the ability to choose between fuel oil and natural gas, Vietnam has just bought its first LNG cargo ever whilst Thailand’s PTT intends to do the same as we head into the heat of summer months. Europe’s TTF spot benchmark has declined in intraday trading earlier today to $24 per MWh (equivalent to $8.2/mmBtu) as higher gas inventories and robust renewables generation is cooling down fears of another squeeze. Natural gas globally has recorded its longest streak of weekly declines since 2007, falling for eight consecutive weeks even as new entrants are coming into the LNG markets.