Crude oil futures were higher during mid-morning trade in Asia Wednesday, shrugging off a purported build in US crude stocks, as market bulls continued to hold court amid a tightening global supply outlook. At 10:50 am Singapore time (0250 GMT), ICE June Brent crude futures were up 42 cents/b (0.61%) from Tuesday’s settle at $69.79/b, while the NYMEX May light sweet crude contract was 28 cents/b (0.45%) higher at $62.86/b.
Analysts quoting American Petroleum Institute data released Tuesday had US crude inventories rising 3 million barrels in the week March 29. Analysts surveyed Monday by S&P Global Platts had been expecting a 100,000-barrel draw. However US gasoline and distillate stocks fell 2.6 million barrels and 1.9 million barrels respectively in the period, analysts citing the API report said. More definitive US oil data is due for release by US Energy Information Administration later Wednesday.
Futures markets largely shrugged off the US data amid a tightening global supply outlook and geopolitical tensions. S&P Global Platts Analytics estimated Venezuelan oil production sank to 750,000 b/d in March from 1.1 million b/d in February as two widespread power blackouts crippled oil infrastructure and export facilities. Still, rising global oil prices were not deterring the White House from considering additional sanctions against Venezuela, US Vice President Mike Pence said Tuesday.
The US imposed sanctions in January that effectively ban US imports of Venezuelan crude and block exports of US diluent to Venezuela. “Venezuela output has virtually collapsed as power cuts have removed critical oil export facilities from the grid. Frankly, Venezuela in a world of hurt lacks the necessary infrastructure to play catch up,” SPI Asset Management head of trading and market strategy Stephen Innes said.