MOSCOW (MRC) -- Crude oil futures extended an uptrend into mid-morning trade in Asia Oct. 11 on a tightening supply outlook, and as a weaker-than-expected US jobs report creates a potential headwind to a recent hawkish change in US Federal Reserve monetary policy, reported S&P Global.
At 10:25 am Singapore time (0225 GMT), the ICE December Brent futures contract was up 78 cents/b (0.95%) from the previous close at USD83.17/b, while the NYMEX November light sweet crude contract was USD1.18/b (1.49%) higher at USD80.53/b.
"WTI crude futures topped USD80/b [Oct. 8] for the first time since November 2014 amid a global energy crisis while OPEC+ producers kept to their supply discipline," UOB market research analysts said in a note Oct. 11.
ANZ research analysts said in a note Oct. 11: "Crude oil gained amid a broader rally in the energy sector as fears of strong demand and supply shortage continue to grip the market. Saudi Aramco warned that high natural gas prices are already boosting oil demand for power generation and heating."
US non-farm payrolls rose 194,000 jobs in September, easing from a 366,000 increase in August, US Department of Labor data released Oct. 8 showed, and well below market expectations of a 500,000 increase.
Oil futures paradoxically moved higher following the report, as the weak growth may add headwinds to a recent hawkish pivot in US Federal Reserve monetary policy, analysts said.
"The jobs report came in well below expectations, questioning the timing of a well-telegraphed November taper, as well easing some enthusiasm about Fed hikes in 2022," TD Securities analysts said in a note. "Energy markets are solidifying at the upper end of recent trading ranges as the fear factor and right tail risks become more embedded heading into the winter months that could exacerbate the energy crisis in Europe and Asia," the TD Securities analysts added.
OCBC Treasury Research said in a note that crude oil was undeterred by the seemingly poor US non-farm payrolls numbers, and noted that Brent had closed above $80/b for a week and may remain above that support level for the time being.
As MRC informed before, 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.
We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.
We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.