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Crude oil futures rise in Asia on bullish China data and tight supply due to Hurricane Ida

September 08/2021

MOSCOW (MRC) -- Crude oil futures were higher in midmorning Asia trade Sept. 8 on bullish Chinese trade data while US output outages due to Hurricane Ida continued supporting prices, reported S&P Global.

At 10:40 am Singapore time (0240 GMT), ICE November Brent futures were 2 cents/b (0.03%) higher at USD71.71/b while the NYMEX October WTI contract was up 14 cents/b (0.20%) at USD68.49/b.

"The US August jobs data is baked in, thus there is no reason for crude to remain under downward pressure. Furthermore, as attention shifts to the continuing and sizable outages in the US Gulf of Mexico and an expected slump in US oil inventories last week, crude should catch a bid," Vandana Hari, CEO of Vanda Insights, told S&P Global Sept. 8, adding that the return of crude oil appetite in China is also positive.

Several analysts have noted bullish signs of demand rising in the airline industry in China, along with the upcoming Golden Week holiday that could be a boost for domestic travel.

"Flight activity continues to improve, with the total number of worldwide flights rising 35% year on year to more than 18,000 flights," ANZ research analysts said in a note.

Chinese crude imports in August rose 8% on the month to 10.53 million b/d, or 44.53 million mt, according to General Administration of Customs data Sept. 7. It was the first time since April that inflows crossed the 10 million b/d mark, signaling a slowdown of destocking activity in China's state-owned oil sector.

Meanwhile, the damage on oil production facilities in the US Gulf following Hurricane Ida continued to keep output largely halted, limiting price declines. More than a week after Ida made landfall, 1.44 million b/d, or 79.33% of total US Gulf crude output, remained shut in, the Bureau of Safety and Environmental Enforcement said Sept. 7.

As informed earlier, Shell said it observed damage from Hurricane Ida to its transfer station West Delta-143 offshore facilities in the Gulf of Mexico. West Delta-143 serves as the transfer station for all production from its assets in the Mars corridor in the Mississippi Canyon area of the Gulf of Mexico to onshore crude terminals. Shell said it is not yet safe to send personnel offshore to learn the full extent of the damage and estimate the effect on production.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also 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.


mrcplast.com
Author:Margaret Volkova
Tags:Asia, crude and gaz condensate, Shell, China, USA.
Category:General News
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