MOSCOW (MRC) -- Crude oil futures drifted lower during mid-morning trade in Asia Nov. 3 amid reports of a large build in US oil inventories last week, while investors remained cautious ahead of the Nov. 4 OPEC+ meeting, reported S&P Global.
At 10:20 am Singapore time (0220 GMT), the ICE January Brent futures contract was down USD1.33/b (1.56%) from the previous close at USD83.39/b, while the NYMEX December light sweet crude contract fell USD1.54/b (1.84%) at USD82.37/b.
"The rally in oil prices took a pause overnight," IG market strategist Yeap Jun Rong said in a note.
"It seems that as the OPEC+ meeting nears, more pressure from countries, such as the US and Japan, to boost production are putting some risk sentiments for oil prices on hold, alongside the much higher-than-expected rise in API crude inventories overnight," Yeap added.
The American Petroleum Institute data out late Nov. 2 showed a 3.6 million barrel build in US crude oil stocks in the week ended Oct. 29.
If confirmed by data from the US Energy Information Administration out later Nov. 3, crude oil inventories would have risen for five of the last six weeks, indicating that demand is not recovering as quickly as expected, industry sources said.
Gasoline inventories, meanwhile, fell 552,000 barrels, while distillate stocks climbed 573,000 barrels, the API data showed.
Nonetheless, calls have been growing for the OPEC+ group to raise production beyond the scheduled 400,000 b/d per month when they convene on Nov. 4. Key oil-consuming countries including the US, Japan and India have pressured the group to temper oil prices that have surged amid a global gas crisis, outages and a lack of oil investments due to climate change pledges.
Recent public comments from OPEC members, however, showed they are unlikely to budge. Kuwait's oil minister said Nov. 1 he supports the OPEC+ group's planned 400,000 b/d monthly crude output hike, while Saudi Arabia's energy minister Prince Abdulaziz bin Salman said Oct. 20 he saw no evidence of a crude shortage.
Most analysts expect the group to stand pat on their scheduled increases when the meeting concludes.
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.