MOSCOW (MRC) -- Crude oil futures extended losses sustained overnight during mid-morning Asian trade Aug. 19, as concerns over the slowdown in oil demand intensified after US data showed a build in US gasoline stockpiles, while investors remained spooked by the delta variant spread, reported S&P Global.
At 10:32 am Singapore time (0232 GMT), the ICE October Brent futures contract was down USD1.03/b (1.51%) from the previous close at USD67.18/b, while the NYMEX September light sweet crude contract fell USD1.07/b (1.63%) at USD64.39/b.
Total US gasoline inventories climbed 700,000 barrels to 228.17 million barrels in the week ended Aug. 13, the Energy Information Administration data released late Aug. 18 showed, snapping four consecutive weekly draws and narrowing the deficit to the five-year average to around 3%.
The build ran counter to market expectations. American Petroleum Institute data released late Aug. 17 showed US gasoline stocks down 1.2 million barrels, while analysts surveyed by S&P Global Platts on Aug. 16 had called for a 2.3 million-barrel decline over the period.
Coming at the tail end of the peak driving season, the news sent both oil benchmarks slumping 1.1%-1.7% overnight. Reports of a 3.23 million-barrel draw in US commercial crude inventories over the same period to 435.54 million barrels did little to offset investor pessimism.
"It appears that the only modestly bearish data point from yesterday's report was that gasoline inventories increased by 696,000 barrels due to a slight decline in implied demand," ING analysts Warren Patterson and Wenyu Yao said.
"Given yesterday's price action, the market is clearly more focused on the global demand outlook than EIA weekly numbers," they added.
COVID-19 case numbers in the US remained stubbornly high despite the government's ongoing vaccination drive. The country recorded 141,893 new cases as of Aug. 17, most recent data from the US Centers for Disease Control and Prevention showed, while the seven-day moving average stood at 130,121 cases.
Nonetheless, ING's Patterson and Yao noted that one bright spot for the supply outlook was the increasingly unlikely return of Iranian oil in the near term, given the lack of progress in nuclear talks.
As MRC informed earlier, crude oil stockpiles fell modestly last week, while gasoline inventories dipped to their lowest level since November, according to the US Energy Information Administration. Crude inventories fell by 447,000 barrels in the week to Aug. 6 to 438.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop. Overall crude inventories have been on the decline for several weeks due to increased demand.
We remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
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