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Crude oil futures drop in Asia as investors see selling opportunities

August 26/2021

MOSCOW (MRC) -- Crude oil futures settled lower during mid-afternoon trade in Asia Aug. 26 as investors saw selling opportunities, but analysts remain bullish as COVID-19-driven apprehensions took a back seat amid continued demand recovery and unexpected supply tightness, reported S&P Global.

At 2:38 pm Singapore time (0638 GMT), the ICE October Brent futures contract was down 15 cents/b (0.21%) from the previous close at USD72.10/b while the NYMEX October light sweet crude contract was down 28 cents/b (0.41%) at USD68.08/b.

"Sentiment has turned bullish after the US drug regulator granted full approval to the Pfizer Inc/BioNTech COVID-19 vaccine, stoking investor hopes that higher fuel demand will follow a potential step up in US coronavirus vaccination rates," said Avtar Sandu, senior manager commodities at Phillip Futures in an Aug. 26 note. "China's apparent success in fighting the Delta variant had boosted demand sentiment further with no cases of transmitted infections."

Data from the Energy Information Administration showed US crude inventories falling by 3 million barrels to 432.6 million barrels for the week ending Aug. 20, bringing inventory levels to roughly 6% below the five-year seasonal average.

The draw was significantly higher than the 1.6-million-barrel figure indicated by the American Petroleum Institute's weekly report, and closer to analysts' expectations of a 3.2-million-barrel draw.

Over the same period, gasoline stocks also fell by 2.2 million barrels to about 3% below the five-year seasonal average, while distillate stocks climbed 0.6 million barrels to about 8% below the five-year seasonal average.

"The fact that inventories fell at the same time as net imports into the US rose suggests Delta (variant) is having limited impact on demand. Inventories at Europe's key oil trading hub are also low, having fallen to its lowest level since March 2020 amidst supply disruptions from Russia," ANZ research analysts said in an Aug. 26 note.

As MRC informed previously, crude oil stockpiles fell modestly in early August, 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.
Author:Margaret Volkova
Tags:Asia, crude and gaz condensate, medicine, USA.
Category:General News
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