MOSCOW (MRC) -- Crude oil futures were slightly higher during mid-morning trade in Asia July 29, supported by the Energy Information Administration's report of draws in US crude and product inventories, and by the depreciation of the US dollar following the conclusion of the Federal Open Market Committee's meeting, reported S&P Global.
At 10:55 am Singapore time (0255 GMT), the September ICE Brent futures contract was up 33 cents/b (0.44%) from the previous close at USD75.07/b, while the NYMEX September light sweet crude contract was 34 cents/b (0.47%) higher at USD72.73/b.
Data released from the EIA late July 28 showed US crude inventories falling 4.09 million barrels to 435.6 million barrels in the week ended July 23. The drawdown pushed inventories 7.1% behind the five-year average, leaving them at their lowest level since the week ended Jan. 31, 2020.
The headline crude draw, while supportive of sentiment, however, failed to spark a significant rally, as the market was already expecting a decline in inventories after the American Petroleum Institute, a day earlier, reported that crude inventories had fallen 4.73 million barrels in the same period.
The crude draw was also not underpinned by a significant improvement in fundamentals, with refinery input falling 130,000 b/d to 15.88 million b/d, the lowest since May. The draw was partly attributable to a slowdown in crude imports, which slid 590,000 b/d to 6.51 million b/d.
Downstream product inventories also recorded declines, with US gasoline falling 2.25 million barrels to 234.16 million barrels, and US distillate inventories falling 3.09 million barrels to 137.91 million barrels in the week ended July 23.
Total products supplied, EIA's proxy for demand, defied a surge in COVID-19 infections in the US to rise 2.63% week on week to 21.23 million b/d.
"Despite all the delta variant concerns, it seems that the hit to crude demand is minimal thus far," Edward Moya, senior market analyst at OANDA, said.
Oil prices were also supported by the depreciation of the US dollar, with the ICE dollar index trading at 92.19 at 10.51 am am Singapore time, 0.27% lower from the July 27 close. The depreciation in the US dollar came after the Federal Reserve reiterated its dovish stance following the FOMC meeting, emphasizing that the central bank has still not set a timeline to taper its asset purchase program.
As MRC informed earlier, Saudi Arabia, the world's top crude oil exporter, will supply full contractual volumes of August-loading crude to at least five Asian customers. However, Saudi Aramco has turned down two of the buyers' requests for extra barrels.
We remind that Mukesh Ambani, chairman and managing director of Reliance Industries Ltd (RIL), said in June he expects the company's deal with Saudi Aramco to materialise this year. Meanwhile, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, joined the board of Reliance as an independent director.
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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
MRC