Crude oil futures were higher in mid-morning Asian trade June 8 as anticipation that an EU ban on Russian oil would tighten supply overshadowed reports of an inventory build in the US.
At 10:18 am Singapore time (0218 GMT), the ICE August Brent futures contract was up 20 cents/b (0.17%) from the previous close at $120.77/b, while the NYMEX July light sweet crude contract was 31 cents/b (0.26%) higher at $119.72/b.
The US Energy Information Administration in an outlook released late June 7 forecast an 18% drop in Russia’s fuel output by end 2023 due to the EU’s ban on seaborne imports of Russian petroleum.
Russian liquid fuel production was estimated to drop to 9.3 million b/day in fourth quarter 2023 from 11.3 million in Q1 2022, according to the EIA.
“This was followed by a host of Wall St firms ramping up their forecasts for crude oil in the second half of the year,” ANZ Research analysts Brian Martin and Daniel Hynes said in a June 8 note.
The American Petroleum Institute late June 7 reported that US crude oil inventories rose 1.85 million barrels in the week ended June 3, while gasoline and distillate stocks rose 1.82 million barrels and 3.38 million barrels, respectively.
“These product builds should offer some relief to the market in the very short term, given concerns over tightening product markets,” ING analysts Warren Patterson and Wenyu Yao said in a June 8 note.
The official US weekly stocks report by the EIA is due for release later June 8.
“If the inventory numbers unexpectedly decline, oil prices might face further bullish interest,” OCBC Treasury Research analysts said in a note June 8.
Dubai crude swaps and intermonth spreads were mixed in mid-morning trade in Asia June 8 from the previous close.
The August Dubai swap was pegged at $109.36/b at 10 am Singapore time (0200 GMT), up 91 cents/b (0.84%) from the June 7 Asian market close.
The July-August Dubai swap intermonth spread was pegged at $2.91/b, up 2 cents/b over the same period, and the August-September intermonth spread was pegged at $2.17/b, down 8 cents/b.
The August Brent/Dubai EFS was pegged at $11.21/b, down 13 cents/b from the previous Asian close.
Source: Spglobal.com
