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Crude oil futures rise on tight US inventories and bullish demand sentiment in China

September 01/2021

MOSCOW (MRC) -- Crude oil futures were higher in mid-morning trade in Asia Sept. 1 amid the tightening of US inventories and bullish demand conditions in China, reported S&P Global.

At 11:15 am Singapore time (0315 GMT), the ICE November Brent futures contract was up 57 cents/b (0.79%) from the previous close at SD72.20/b, while the NYMEX October light sweet crude contract was 52 cents/b (0.75%) higher at USD69.02/b.

"The market is starting to digest the fact that the oil production outage is probably going to take some time in resuming, which will cause a tightening of crude inventory along with the rising demand, resulting in bullishness in the market," said Vandana Hari, CEO of Vanda Insights on Sept. 1, adding that China's appetite for crude oil seems to be recovering after successfully curbing the resurgence of delta variant.

Edward Moya, senior market analyst from OANDA noted there was optimism for crude demand across Europe as 70% of the adults in the EU are fully vaccinated.

In the offshore Gulf of Mexico, or GOM, roughly 1.7 million b/d of crude production remained offline Aug. 31, which is 94% of the total GOM output, the US Bureau of Safety and Environmental Enforcement noted. That was down slightly from 1.72 million b/d a day prior.

Meanwhile, the OPEC+ alliance is scheduled to meet Sept. 1 to decide whether to press on with plans to hike crude production by 400,000 b/d every month, as it is looking to eventually remove its output cuts implemented at the start of the pandemic.

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, China, USA.
Category:General News
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