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Crude oil futures down in Asia on profit-taking after overnight rally, but outlook remains bullish

September 24/2021

MOSCOW (MRC) -- Crude oil futures were lower in mid-morning trade in Asia trade Sept. 24 amid profit-taking after an overnight rally, but the outlook remains bullish, reported S&P Global with reference to market sources.

At 10:40 am Singapore time (0240 GMT), the ICE November Brent futures contract was down 15 cents/b (0.19%) from the previous close at USD77.10/b, while the NYMEX November light sweet crude contract was 20 cents/b (0.27%) lower at USD73.10/b.

"There seems to be some profit-taking this morning. We will expect higher volatility in the coming day as crude is in a recalibration mode with an eye on the Europe gas crunch," Vandana Hari, CEO of Vanda Insights, said Sept. 24.

ANZ research analysts noted that Brent crude oil prices were still at a three-year high above USD77/b and that a prolonged recovery from Hurricane Ida disruptions and robust demand were eating into oil stockpiles.

Other analysts shared similar sentiment, with IG market strategist Yeap Jun Rong saying that recent drawdowns in US crude inventories have added support in the oil market.

US oil supply remains tight in the wake of Hurricane Ida as operators in the US Gulf of Mexico struggle to return to full production. Around 294,214 b/d or 16.18% of total Gulf production remained shut-in as of Sept. 23, according to the Bureau of Safety and Environmental Enforcement. Despite the proportion of offline production easing from a week earlier, full recovery in the near term was unlikely due to damage to pipeline infrastructure.

As informed earlier, Shell said earlier this month 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 then it was 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.
Author:Margaret Volkova
Tags:Asia, crude and gaz condensate, petrochemistry, Shell, USA.
Category:General News
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