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Crude oil futures drop in Asia as market awaits US stocks data for fresh pricing cues

October 13/2021

MOSCOW (MRC) -- Crude oil futures were lower in mid-morning trade in Asia Oct. 13 as investors awaited the release of weekly US stocks data for fresh pricing cues, reported S&P Global.

At 10:30 am Singapore time (0230 GMT), the ICE December Brent futures contract was down 61 cents/b (0.73%) from the previous close at USD82.81/b, while the NYMEX November light sweet crude contract was 58 cents/b (0.72%) lower at USD80.06/b.

The pause in the recent sustained rally could prompt profit taking, but that may also prompt buying on the dips by market participants anticipating more upside to emerge in the coming week.

Investors are awaiting the release of weekly US stocks data by the American Petroleum Institute later Oct. 13 and more definitive numbers by the US Energy Information Administration the following day for fresh pricing cues.

Analysts polled Oct. 11 by S&P Global were expecting the data to show a 500,000-barrel draw in US crude stocks to 420.4 million barrels for the week ended Oct. 8, which would run counter to seasonal trends; US inventories typically build as refinery runs slow with the onset of shoulder season maintenance.

ANZ research analysts in a note said that crude oil prices have ebbed and flowed as investors debate the impact of energy shortages in Asia and Europe, but there were growing expectations that high prices for gas and thermal coal were likely to boost demand for alternatives such as diesel and fuel oil.

Supply outlooks also remain constrained by the high gas and coal prices that raise the prospect of more switching to oil for power generation.

ANZ analysts referenced TotalEnergies CEO Patrick Pouyanne as saying that demand for fuel oil was soaring in parts of Asia as buyers turn away from gas, and also the IMF cautioning that threats to growth have increased amid rising costs for food and fuel.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

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, Europe, crude and gaz condensate, gas processing, petrochemistry, Total Petrochemicals, USA.
Category:General News
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