(S&P Global Platts) Crude oil futures rose in mid-morning trade in Asia Jan. 13 on a larger-than-expected draw in US crude inventories and a weakening US dollar.
At 10:29 am Singapore time (0229 GMT), the ICE Brent March contract was up 55 cents/b (0.97%) from the Jan. 12 settle at $57.13/b, while the February NYMEX light sweet crude contract was up 49 cents/b (0.92%) over the same period at $53.70/b. The markers had risen 1.65% and 1.84%, respectively, on Jan. 12.
American Petroleum Institute data released Jan. 12 showed a 5.821-million-barrel decline in US crude inventories for the week ended Jan. 8. This was larger than expected; analysts surveyed by S&P Global Platts had predicted a 3.8-million-barrel draw.
The API data also showed a 1.876-million-barrel build in gasoline and 4.433-million-barrel build in distillate inventories, but the market ignored these indications of depressed fundamentals in downstream markets.
At 10:29 am, the NYMEX February RBOB contract was trading 1.64 cents/gal (1.06%) higher than the Jan. 12 settle at $1.5694/gal, and the NYMEX February ULSD contract was up 1.24 cents/gal (0.78%) over the same period at $1.6091/gal.
Market participants are awaiting the release of more comprehensive inventory data by the US Energy Information Administration slated for later in the day for confirmation of the draw.
Analysts noted that oil prices were also benefitting after the US dollar resumed its downtrend after a brief rally.
“Crude oil prices gained as a weaker USD saw investor appetite improve. The recent strength in the USD has been a headwind for commodity markets over the past week; although underlying fundamentals have helped offset it,” ANZ analysts said in a Jan. 13 note.
Amid tightened supply outlooks following Saudi Arabia’s 1 million b/d production cut and upward-trending demand projections, the EIA in its monthly Short-Term Energy Outlook released Jan. 12 revised its crude price forecast higher.
The EIA now expects Brent crude prices to average $52.75/b in 2021, up $4.25/b from its December forecast, and the WTI price to average $49.75/b, up $4/b.
Despite the upward revision, the EIA’s forecast remains less bullish than some banks including Citibank, which sees Brent crude averaging $59/b in 2021 and WTI $56/b.