(S&P Global Platts) Crude oil futures were stable to higher during mid-morning trade in Asia trade Sept. 23 amid supply constraints and a draw in US crude stocks.
At 10:10 am Singapore time (0210 GMT), the ICE November Brent futures contract was up 15 cents/b (0.2%) from the previous close at $76.34/b, while the NYMEX November light sweet crude contract was 9 cents/b (0.12%) higher at $72.32/b.
“Crude prices rallied after US stockpiles tumbled to the lowest levels since October 2018,” said OANDA senior market analyst Edward Moya, adding that oil market fundamentals were turning bullish as concerns of an economic slowdown in China eased and amid forecasts that supply shortages for natural gas could lead to increased demand for oil.
ANZ Research analysts similarly noted that crude oil prices have risen as supply availability was back in focus, with US oil inventories falling for the seventh consecutive week.
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.
Oil supply disruptions due to Hurricane Ida continue as operators in the US Gulf of Mexico struggle to return to full production. Almost 294,214b/d or 16.18% of production remained shut-in as of Sept. 22. according to the Bureau of Safety and Environmental Enforcement. US crude output averaged 10.6 million b/d in the week ended Sept. 17, up 500,000 b/d week on week but still down 900,000 b/d from pre-Ida levels.
Global oil supply was also expected to remain tight, with UAE energy minister Suhail al-Mazrouei saying Sept. 21 that OPEC and its allies should stick to its agreement to increase production by 400,000 b/d each month, even as some observers call for a greater production increase as pandemic restrictions ease, S&P Global Platts reported.
China’s oil product exports have also fallen due to tight quota availability and government controls, with gasoline exports falling 23% month on month in August to a three-month low, Platts reported.
Sentiment was further supported by expectations of a spillover impact from higher gas prices as the natural gas market continues to trade at elevated levels amid tightness going into winter.
“European gas storage is a little over 72% full, compared to the 5-year average of around 88% for this time of year,” ING research analysts said Sept. 23.