MOSCOW (MRC) -- Crude oil futures were higher in midmorning trade in Asia Nov. 10, on track for a fourth straight day of gains, as a US Energy Information Administration report forecast supply to exceed demand next year and eased concerns about a possible Strategic Petroleum Reserve release, reported S&P Global.
At 10:49 am Singapore time (0249 GMT), the ICE January Brent futures contract was up 38 cents/b (0.45%) from the previous close at USD85.16/b while the NYMEX December light sweet crude contract rose 14 cents/b (0.17%) at USD84.29/b.
The EIA in its latest Short-Term Energy Outlook said growth in output from OPEC+ members, US shale and other non-OPEC countries will outpace slowing growth in global oil consumption in 2022. It forecast Brent prices easing from current levels to an average of USD72/b for the year.
For the remainder of 2021, it expects Brent prices to remain near current levels, averaging USD82/b in the fourth quarter.
The EIA trimmed the outlook for 2022 global oil demand growth by 130,000 b/d from last month to 3.35 million b/d, but raised its outlook for US oil production to 11.13 million b/d in 2021, up 110,000 b/d from last month's outlook, and to 11.9 million b/d in 2022, up 170,000 b/d.
The report has eased concerns that the Biden administration will tap its SPR to curb what it sees as an excessive run-up in oil prices, analysts said. President Joe Biden has been vocal in calling on OPEC to raise output beyond their quota levels, and senior officials of the administration have hinted in recent days that Biden might take action in the week started Nov. 7.
Oil prices have added 4.2%-5.3% in value since a brief correction mid last week and were now on track to surpass seven-year peaks touched in late-October. Investors have been quick to buy any dip as the narrative of a tight supply market continued to dominate the sentiment.
Media reports said that American Petroleum Institute data showed a draw in US crude oil inventories in the week ended Nov. 5. If confirmed by the EIA's weekly inventory numbers out later Nov. 10, this would mark the second weekly drop in crude oil inventories in seven weeks.
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.