MOSCOW (MRC) -- Crude oil futures were mixed during mid-morning trade in Asia Oct. 21, following a rally overnight, but sentiment remained firm after an unexpected US inventory draw raised hopes of demand recovery, reported S&P Global.
At 10:39 am Singapore time (0239 GMT), the ICE December Brent futures contract was down 6 cents/b (0.07%) from the previous close at USD84.49/b, while the NYMEX November light sweet crude contract rose 13 cents/b (0.16%) at USD83.55/b.
"Crude prices rallied after US stockpiles unexpectedly declined and as gasoline demand strengthened despite the high prices at the pump," said OANDA's Senior Market Strategist Edward Moya, adding that the oil market deficit is not going away anytime soon as gasoline and distillate demand remains healthy, while jet fuel demand should pick up next month as international roars back.
Total commercial crude stocks fell 430,000 barrels in the week ended Oct. 15 to 426.54 million barrels, US Energy Information Administration data showed Oct. 20, putting them around 6% behind the five-year average for this time of the year. Total motor gasoline inventories decreased by 5.4 million barrels on the week, while distillate fuel inventories decreased by 3.9 million barrels on the week.
The bulk of the crude draw was realized at the NYMEX delivery point of Cushing, Oklahoma, where stocks dropped 2.32 million barrels to 31.23 million barrels. The draw was the largest one-week inventory slide at Cushing since February, leaving inventories nearly 40% behind the five-year average and at the lowest since October 2019.
Sharing similar sentiment, ANZ research analysts pointed out in an Oct. 21 note that demand for gasoline was also strong, with a 5.37 million barrel withdrawal pushing inventories to their lowest level since November 2019.
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.
MRC