Crude oil futures were stable to marginally higher during mid-morning trade in Asia Tuesday amid an expected drop in US crude inventories, while ongoing supply tensions elsewhere continued to support prices. At 11:05 am Singapore time (0305 GMT), ICE May Brent crude futures were up 8 cents/b (0.12%) from Monday’s settle at $67.29/b, while the NYMEX May light sweet crude contract was 36 cents/b (0.61%) higher at $59.18/b.
Analysts surveyed Monday by S&P Global Platts were looking for US crude inventories to have fallen by around 2.2 million barrels for the week ended March 22. The draw, if confirmed by the US Energy Information Administration data to be released Wednesday, would drop inventories to 437.3 million barrels, a 10-week low and 2.9% under the five-year average.
Distillate stocks likely dipped 800,000 barrels to 131.4 million barrels, and gasoline inventories were expected to be 3.6 million barrels lower at 237.9 million barrels, according to the consensus of the analysts surveyed. Still, a combination of bullish and bearish indicators would likely keep prices steady in the near term, industry sources said.
“A moderate drawdown across the board in US crude and products stockpiles may provide some support to crude, though it would be battling against downward pressure from renewed talk of a US recession and lingering global growth concerns. With the exception of a surprising and sizeable build or draw in weekly US crude inventories, crude looks set for range-bound trading,” Vanda Insights founder Vandana Hari said.
“Crude oil prices swayed between gains and losses as the market was confronted with signs of weaker growth amidst ongoing supply-side issues,” ANZ analysts said in a note Tuesday. “US sanctions on Venezuela have crippled exports in recent weeks. Political pressure enveloping the country is rising, with Russia sending in military personnel in an effort to support the administration of Nicolas Maduro,” the analysts added.
In other news, Libya’s National Oil Corporation on Monday said it was backing demands by its unionized workers for a 67% salary increase that has been promised by the government since 2013, as the company seeks to head off further labor unrest that could affect oil production. Libya’s oil recovery has been impacted by worker protests and tribal grievances, causing production to be volatile, including at its largest field, Sharara, which only reopened this month after being blockaded in December.