Energy Spotlight: Brent back to $94/bbl; gas benchmarks see relief but still at record highs

Fri 02 Sep 22, 3:58pm (AEDT)
Transmission lines extend from the foreground to the horizon before a setting sun in the background
Source: Unsplash

Key Points

  • Oil is back near $94/bbl ahead of an OPEC+ meeting; but down from last Friday’s $100/bbl. Mid-week, the price hit $91/bbl
  • Gas benchmarks in the EU, UK, are still high, but have come down slightly with relief on EU storage levels and macro headwinds
  • Covid is currently present in every province in China; sure to inform global sentiment forecasts

Just when it looked like oil traders might be about to hit a bullish run, the completely unsurprising speeches given at last week’s Jackson Hole event appear to have surprised the markets. 

The big takeaways: inflation is here to stay; yes, we still need to raise interest rates, and no, the recent market rally was not a fair indication of fundamental values. 

The resulting global depression of sentiment has resulted in a bearish retreat on oil prices; driven by downgrades to optimistic forecasts for demand in the macro environment. 

Brent Crude price charts over the last week (TradingEconomics)
Brent Crude price charts over the last week (TradingEconomics)

Also worth noting: covid is currently present in every single province in China, as revealed by the team at Bloomberg Surveillance earlier this week. 

Gas benchmarks in the EU and UK remain at dramatically high prices compared to half a decade ago; but, the last week did see significant reversals in prices as the impact of Gazprom’s shutdown on Nord Stream 1 was absorbed and the same macro concerns hitting crude extended to gas. 

Gas storage levels are also part of that relief. US gas futures, meanwhile, are near record highs of $10/GJ. 

The UK, has, however, flagged its intention to raise the cap on household energy bills; and the BoE is still predicting a recession to hit the UK in late 2022. The US is technically in one now, too. 

In short: the bear still reigns. 

The last week's charts for US natural gas futures (TradingEconomics)
The last week's charts for US natural gas futures (TradingEconomics)

Price headwinds

  • The US is in a technical recession

  • Stocks all around the world dipped midweek as a worldwide depression of sentiment becomes evident

  • Chinese lockdowns will likely remain into 2023 as the virus re-enters every single province in China

Price drivers

  • An upcoming OPEC+ meeting poses the possibility the cartel may cut output

  • Geopolitical volatility continues to boost gas futures in Western Europe, echoing into US and Asian markets

What to look out for next week 


  • Baker Hughes US rig count data


  • Australian RBA interest rate decision 


  • Australia GDP growth rate for Q2 

  • Chinese Balance of Trade data for August 

  • US Balance of Trade data for July 

  • Bank of Canada interest rate decision 

  • Chinese import and export date for August 

  • German industrial production data for July 

  • EU GDP early growth rate Q2 data 


  • Australian Balance of Trade data for July 

  • European Central Bank interest rate decision 

  • Weekly US energy stockpile data drop 


  • Chinese inflation rate data for August

And what about the Oz majors?

The S&P/ASX 200 Energy Index (aka XEJ) closes the week down -0.02%.

Last Friday, its price sat at $36.01.

Its price hovers near where it was last Friday, at $7.94.

Its price hovers where it was last Friday, at $1.76.

Related Tags

Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

Get the latest news and insights direct to your inbox

Subscribe free