Crude oil futures were higher during mid-morning trade in Asia Wednesday after latest weekly data showed an unexpected drawdown in US crude stocks, while OPEC producers were expected to keep production constrained.
At 10:43 am Singapore time (0243 GMT), May ICE Brent crude futures were up 12 cents/b (0.18%) from Tuesday’s settle at $66.79/b, while the NYMEX April light sweet crude contract was 20 cents/b (0.35%) higher at $57.07/b. Crude oil prices rose after the release of an industry report late Tuesday showing an unexpected drop in US crude inventory, UOB analysts said in a note.
US crude inventories fell 2.58 million barrels in the week to March 8, swinging from an increase of 7.29 million the week before, the American Petroleum Institute said in a weekly report. Analysts surveyed by S&P Global Platts on Monday had been expecting a 3.3 million-barrel build.
US gasoline inventories fell 5.85 million barrels in the week to March 8, while US distillate inventories rose by 195,000 million barrels, according to the API report. More definitive numbers from the US Energy Information Administration are due for release later Wednesday. Analysts noted that headlines coming out of an industry event in Houston this week supported the view that producers will remain constrained.
“OPEC Secretary General Mohammad Barkindo said that they aren’t worried about US shale. What they are concerned about is orderly growth and orderly expansion meeting current demand,” ANZ analysts said in a note Wednesday. Saudi Arabia remained at the forefront of the output cuts, with officials saying this week that the kingdom may keep its crude oil production below 10 million b/d in April, well below its quota of 10.31 million b/d.
“Crude oil prices pushed higher as the market remained optimistic that Saudi Arabia will continue to cut production. This follows reports earlier this week that the kingdom plans to produce well below 10 million b/d in April,” the ANZ analysts added. Platts.com
