New York — Crude oil futures settled lower Feb. 11, retreating from 13-month highs as traders booked profits amid mixed demand outlooks.
NYMEX March WTI settled 44 cents lower at $58.24/b, and ICE April Brent declined 36 cents to $61.11/b.
The International Energy Agency on Feb. 11 pointed to a tightening oil market this year, despite lowering its estimate of the recovery in global oil demand and seeing improving non-OPEC supply growth.
The Paris-based agency predicts global oil demand will grow by 5.4 million b/d in 2021 to reach 96.4 million b/d, noting this would be around 60% of the volume lost to the pandemic in 2020.
This is the fourth straight month the IEA has lowered its demand outlook, given the challenges the world is having in reining in COVID-19, as it shifted its optimism to the second half of the year.
“Crude prices are taking a moment after the February breakout took prices above levels some analysts thought couldn’t be touched until a couple years down the road,” OANDA senior market analyst Edward Moya said in a note. “The key for whether the crude rally continues is if we don’t see a spike in [COVID-19] cases as restrictive measures are eased.”
It was the first down day for front-month WTI since Jan. 29 and for front-month Brent since Jan. 28.
Downside price pressure from the IEA report was blunted after OPEC raised its estimate of 2021 global oil demand from last month, saying growth, especially for industrial fuels, in the second half will be led by positive economic developments supported by “massive stimulus programs.”
Demand will average 96.1 million b/d this year, up from 95.91 million b/d forecast last month, OPEC said Feb. 11 in its closely watched monthly market report. The estimated increase of 5.8 million b/d over 2020 was revised down by about 100,000 b/d as H1 projections were lowered due to extended and partially re-introduced lockdowns because of the pandemic. Demand fell 9.7 million b/d in 2020.
S&P Global Platts Analytics takes a more sanguine view, predicting global oil demand will grow by 6.1 million b/d after a contraction of 8.8 million b/d in 2020, as it sees an even quicker recovery.
NYMEX March RBOB settled down 32 points Feb. 11 at $1.6502/gal, and March ULSD declined 1.64 cents at $1.7446/gal.
RBOB cracks edged higher as the market clawed back some losses posted during the previous session. The front-month ICE New York Harbor RBOB crack versus Brent was holding around $13.64/b in afternoon trading, up from $13.46/b the session prior.
US gasoline stocks rose by 4.3 million barrels the week ended Feb. 5, US Energy Information Administration data showed Feb. 10, including a 3.43 million-barrel increase on the US Atlantic Coast, home of the New York delivery point for NYMEX RBOB futures.
The USAC build pushed stocks 1.4% above the five-year average, snapping a six-week tightening trend that saw inventories fall as much as 3.2% behind average in late January.
Front-month RBOB declined nearly 1% Feb. 10 against a broadly higher oil complex, weighing on cracks.
