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Crude oil futures rise in Asia on bullish demand outlook

October 15/2021

MOSCOW (MRC) -- Crude oil futures were higher in mid-morning trade in Asia Oct. 15 as bullish US inventory data and requirements for the upcoming winter continued to support the demand outlook, reported S&P Global.

At 10:25 am Singapore time (0225 GMT), the ICE December Brent futures contract was up 49 cents/b (0.58%) from the previous close at USD84.49/b, while the NYMEX November light sweet crude contract was 42 cents/b (0.52%) higher at USD81.73/b.

"Crude oil gained amid signs of ongoing tightness in the market. US inventories at Cushing, the pricing hub for WTI, has also recorded the biggest fall since June," ANZ research analysts said in a note Oct 15, adding that the US Energy Information Administration expects shortages of natural gas to boost demand for crude oil by 500,000 b/d over the next six months.

Crude Inventories at NYMEX delivery point of Cushing, Oklahoma fell almost 2 million barrels to 33.55 million barrels in the week ended Oct. 8, the lowest since October 2018 and nearly 35% behind the five-year average, latest EIA data showed.

The EIA data showed that total US commercial crude inventories climbed 6.09 million barrels to 426.98 million barrels in the week ended Oct. 8, narrowing the inventory deficit to the five-year average to 6.2% from 7% the week before. Total US gasoline stocks fell 1.96 million barrels to 223.11 million barrels in the week, while distillate stocks fell 20,000 barrels to 129.31 million barrels.

Tightening availability at Cushing has supported prompt WTI pricing and contributed to a significant widening in the forward curve's backwardation. The year-ahead WTI contract settled at a USD7.47/b discount to the front-month Oct. 14, the widest backwardation since July 13.

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