MOSCOW (MRC) -- Crude oil futures fell during midafternoon trade in Asia Nov. 12 on profit-taking activity following uncertainty about any US intervention to curb rising oil prices, including releasing some of its Strategic Petroleum Reserve, reported S&P Global.
At 2:59 pm Singapore time (0659 GMT), the ICE January Brent futures contract was down 68 cents/b (0.82%) from the previous settle at USD82.19/b while the NYMEX December light sweet crude contract was 62 cents/b (0.76%) lower at USD80.97/b.
"The uncertainty over how US may intervene to curb elevated oil prices may draw some profit-taking, coming off the back of a stronger US dollar and virus resurgences in China and Europe, which may dampen some sentiments on eventual reopening," IG market strategist Yeap Jun Rong told S&P Global Platts Nov. 12.
Some analysts have talked about the buildup of a risk-off sentiment as there were few events to move markets at the end of the week, particularly after recent headlines of higher-than-expected US inflation numbers weighing on investors' minds.
The US recorded its highest inflation rate in 31 years. Data from the Bureau of Labor Statistics showed Nov. 10 that consumer prices rose 6.2% year on year and 0.9% month on month.
This has also led to a stronger dollar index, which in turn impacted oil prices. At 2.59 pm in Singapore, the Dollar Index was trading at 95.20, up 0.02% from the previous close at 95.18.
Market watchers were awaiting moves from the Biden administration on a possible release of SPR crude in a bid to combat high gasoline prices, which might stem rising oil prices.
"US President Biden is facing pressure from fellow Democrats to address high gasoline prices with measures such as a ban on oil exports. He is still weighing the merits of an emergency release of crude from strategic reserves," ANZ research analysts said.
Echoing a similar sentiment, UOB Market Research has said that traders have remained concerned about whether the Biden administration would intervene to cool rising energy prices in response to growing political pressure, including from his own party.
Meanwhile, the OPEC+ alliance released its latest monthly market report late Nov. 11 that saw only marginal changes to supply and demand estimates for both this year and next. The group has downgraded its 2021 global oil demand forecast by 160,000 b/d.
The group also cut its demand estimates for the final quarter of this year, expecting that high energy prices will have a dampening impact on demand.
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, EIA said in a monthly report earlier this year, a smaller decline than its previous forecast for a drop of 210,000 bpd.