Crude oil futures inched higher in the mid-morning trade in Asia June 30 on the back of investors awaiting the outcome of the OPEC+ meeting taking place later today and the US data showing a build-up in distillate and gasoline stocks over the last two weeks.
At 11:21 am Singapore time (0321 GMT), the ICE September Brent futures contract was up 54 cents/b (0.48%) from the previous close at $112.99/b, while the NYMEX August light sweet crude contract rose 38 cents/b (0.35%) at $110.16/b.
US gasoline inventories climbed 2.65 million barrels to 221.61 million barrels in the week ended June 24, Energy Information Administration reported June 29. The increase stemmed from the 1.49-million-barrel stock build-up seen in the week ended June 17.
EIA reported two weeks of data June 29, after a systems issue delayed the June 22 data release.
Nationwide distillate inventories meanwhile rose by a combined 2.69 million barrels to 112.4 million barrels over the same period, while commercial crude oil stocks declined by 3.15 million barrels, reaching a four-week-low of 415.57 million barrels in the week ended June 24.
“EIA data showed a smaller crude inventory draw than expected and a bearish, unexpected product build with gasoline inventories rising by 2.65 million barrels [on the week for the week ended June 24], possibly indicating that higher prices at the pump are begging to trigger demand destruction at the pump as consumer sentiment continues to deteriorate worldwide,” said SPI Asset Management Managing Partner Stephen Innes in a June 30 note.
Analysts drew attention to crude inventories at the NYMEX delivery point of Cushing, Oklahoma, which saw a decline of 1.35 million barrels to 21.26 million barrels in the week ended June 24, nearly an eight-year low. It was last lower in the week ended October 31, 2014.
“Despite these declines in crude stocks, the WTI prompt spread has weakened from its recent highs,” ING analyst Warren Patterson said. The M1-M2 NYMEX crude inter-month spread has fallen by 42 cents/b over the last two sessions, settling at $2.77/b at the June 29 close, S&P Global Commodity Insights data showed.
The OPEC+ group is set to meet later June 30, but it is expected that the group’s policy agreed earlier this month for an output hike of 648,000 b/d in July and August will be unchanged, analysts said.
Dubai crude swaps were lower in the mid-morning trade in Asia June 30 from the previous close, but intermonth spreads were higher.
The August Dubai swap was pegged at $104.99/b at 11 am Singapore time (0300 GMT), down 33 cents/b (0.31%) from the June 29 Asian market close.
The July-August Dubai swap intermonth spread was pegged at $4.10/b at 0200 GMT, up 3 cents/b over the same period, while the August-September intermonth spread was pegged at $3.29/b, up 11 cents/b.
The August Brent/Dubai EFS was pegged at $11.26/b, down $1.08/b.