Crude oil futures were marginally lower during mid-morning trade in Asia Friday amid bearish report on US crude inventories last week, but bullish data on product stocks and an upcoming storm in the Gulf of Mexico helped stem further losses. At 10:30 am in Singapore (0230 GMT), ICE Brent December futures were down 21 cents/b (0.35%) from Thursday’s settle at $59.7/b, while the NYMEX November light sweet crude futures contract ticked 5 cents/b (0.09%) lower at $53.88/b. According to data released by the US Energy Information Administration on Thursday, US crude inventories for the week ended October 11 were up 9.28 million barrels to 434.85 million barrels, as refiners went deeper into fall maintenance, reducing demand for feedstocks.
Crude stocks have risen 19 million barrels over the past five weeks, as refiners have reduced inputs by roughly 2 million b/d, EIA data showed. Analysts surveyed Tuesday by S&P Global Platts, on the other hand, were expecting US crude stocks to have increased by 4 million barrels for the same period. The downward pressure on crude prices were, however, minimal as bullish data on product inventories helped to nullify the losses, said analysts.
“The market had expected it [a build],” said ANZ analysts in a note Friday. “Drawdowns in product inventories outweighed a rise in crude stockpiles,” they added. US gasoline inventories were down 2.56 million barrels to 226.2 million barrels, while US distillate stocks fell 3.8 million barrels last week to 123.5 million barrels, EIA data showed. Meanwhile, market participants are also closely following the developments around the ongoing US-China trade talks. China on Thursday said that the US must remove tariffs in order for the two countries to reach a final agreement on trade.
Elsewhere, oil and gas producers in the Gulf of Mexico were preparing for the arrival of a tropical storm. The weather system is expected to become a tropical or subtropical storm later Friday and currently is on track to make landfall along the Florida Panhandle overnight Friday into Saturday.