MOSCOW (MRC) -- Crude oil futures inched higher in mid-morning trade in Asia Nov. 9 amid thin activity, though sentiment was pressured by reports that the US was considering taking action to curb rising oil prices, reported S&P Global.
At 10:11 am Singapore time (0211 GMT), the ICE January Brent futures contract was up 11 cents/b (0.13%) from the previous close at USD83.54/b, while the NYMEX December light sweet crude contract was similarly up 11 cents/b (0.13%) at USD82.04/b.
US Energy Secretary Jennifer Granholm said Nov. 8 that US President Joe Biden might take action this week to address soaring oil and gasoline prices. The US President has been vocal in recent weeks in calling on OPEC to raise output beyond their planned quotas and has blamed the group for the current high oil prices.
Analysts said the most likely option for the Biden administration was to tap its Strategic Petroleum Reserves. A ban on crude oil exports, an option that had been brought up by Granholm in the past, was less likely.
"The most obvious tool for the US administration to use is the Strategic Petroleum Reserve," said ING analysts Warren Patterson and Wenyu Yao in a note.
"Outside of mandated and SPR modernization sales (and a test sale in 2014), the last sale was part of a coordinated IEA release back in June 2011, which saw 30.6 million barrels released. There have also previously been suggestions that the US could implement a ban on crude oil exports. While we believe this is less likely, if such action was taken, it would lead to a widening in the WTI/Brent discount," Patterson and Yao said.
Nonetheless, there are signs that the OPEC+ group continues to face difficulty in ramping up output to required levels.
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.
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