MOSCOW (MRC) -- Crude oil futures were higher during mid-morning trade in Asia July 1 after the Energy Information Administration reported a large draw in US crude inventories, but the upside was capped by lackluster US products data and caution ahead of the OPEC+ meeting scheduled for later in the day, reporte S&P Global.
At 10:21 am Singapore time (0221 GMT), the ICE September Brent futures contract was up 30 cents/b (0.40%) from the previous settle at USD74.92/b, while the NYMEX August light sweet crude contract was 28 cents/b (0.38%) higher at USD73.75/b.
EIA data released late June 30 showed a headline US crude draw of 6.72 million barrels to 452.34 million barrels in the week ended June 25, almost 7% below the five-year average for this time of year and marking the sixth consecutive week of decline amid rising US refinery demand. Total US net crude inputs rose 190,000 b/d to average 16.3 million b/d in the week, while refinery utilization climbed 0.7 percentage points to 92.9% of total capacity, the highest since the week ended Jan. 3, 2020.
However the boost to global prices was limited, as the market had been expecting the large fall in crude inventories after the American Petroleum Institute a day earlier reported a 8.15 million-barrel draw for the same week, and the products data was lackluster. US gasoline inventories rose 1.52 million barrels to 241.57 million barrels in the week, while total product supplied for gasoline, the EIA's proxy for demand, slipped around 3% to a three-week low of 9.17 million b/d.
Distillate inventories slipped 870,000 barrels to 137.10 million barrels, even as implied demand rose 5.6% to 4.17 million b/d.
The relative stability in the market comes as investors await the OPEC+ meeting scheduled for later in the day, which was expected to provide guidance on the producer group's production quotas for August.
Analysts have said that given the demand-side risk posed by the resurgent spread of the Delta coronavirus variant, and with additional Iranian barrels potentially entering the market following a possible deal on the Joint Comprehensive Plan of Action, the coalition is likely to agree on a tempered increase of 500,000 b/d of oil production in August.
"Saudi Arabia remains cautious on demand and Iran nuclear talks, while Russia is more focused on regaining market share as demand rebounds," Platts Analytics said in a recent note. "However, with Brent already in the mid-USD70s, both will likely be committed to not overheating the market."
We remind that as MRC informed 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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.