MOSCOW (MRC) -- Crude oil futures were lower during mid-morning trade in Asia June 4 as the market used mixed data from the Energy Information Administration as an excuse to lock in profits following the recent surge in oil prices, while a stronger dollar provided further headwinds for the market, reported S&P Global.
At 11:06 am Singapore time (0306 GMT), the ICE Brent August contract was down 26 cents/b (0.36%) from the previous settle at USD71.05/b, while the July NYMEX light sweet crude contract was down 19 cents/b (0.28%) at USD68.62/b.
Data from the EIA released late June 3 was mixed, as it showed a draw in US commercial crude inventories, but builds in US product inventories.
Rising refinery demand coupled with lower production saw crude stocks fall 5.08 million barrels to 479.27 million barrels in the week ended May 28, the data showed. Crude stocks are at its lowest since the week ended Feb. 19, nearly 3% behind the five-year average.
US gasoline and distillate inventories, meanwhile, climbed 1.5 million barrels and 3.72 million barrels to 233.98 million barrels and 132.8 million barrels, respectively.
"After an impressive rally that saw oil prices settle near multi-year highs on June 3, market participants took the builds in the downstream product inventories as a reason to pause and lock-in their profits," Vandana Hari, CEO of Vanda Insights, told S&P Global Platts June 4.
Hari, however, added that the builds in gasoline and distillate inventories belied strong demand for these products in the US. Other analysts have echoed a similar view, and are in particular optimistic over the prospect of a surge in gasoline demand, as Americans are expected to unleash pent-up demand for travel on the roads during the country's ongoing summer driving season.
Adding downward pressure on the oil markets was the appreciation in the US dollar, which came as the US Federal Reserve announced plans to wind down the corporate bond portfolio it bought during the pandemic, lending credence to the notion that it is considering further policy unwinds.
We remind that, as MRC wrote earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world"s third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.