Singapore — 0307 GMT: Crude oil futures ticked up during the mid-morning trade in Asia March 3 as the market regained its footing after an overnight sell-off, with investors attention now focused on the upcoming OPEC+ meeting.
At 11:07 am Singapore time (0307 GMT), the ICE Brent May contract was up by 32 cents/b (0.51%) from the March 2 settle to $63.02/b, while the April NYMEX light sweet crude contract was up by 26 cents/b (0.44%) to $60.64/b.
Both markers have been on a downward trajectory since late last week, falling 5.16% and 5.95% from the Feb. 25 settle to close at $62.70/b and $59.75/b respectively on March 2.
The slight rise in prices comes as investors carry out bargain hunting activities to take advantage of low prices following the protracted sell-off, even as uncertainty over the upcoming OPEC+ meeting continues to grip the markets, potentially leading to unpredictable price movements.
“There is been an uninterrupted sell-off in crude since last week, as the market has progressively priced-in the return of supply following the US deep freeze, and for the rest of this week, there will be volatility in the market as the market awaits the OPEC+ meeting and grapples with erratic US stocks data,” Vandana Hari, CEO of Vanda Insights told S&P Global Platts on March 3.
Market analysts generally expect the March 4 OPEC+ meeting to conclude with the coalition easing production quotas by up to 500,000 b/d from April onwards, and with Saudi Arabia choosing not to extend its unilateral 1 million b/d output cut. Both these outcomes could see up to 1.5 million b/d of oil returning into the market.
“If the total figure is between 1-1.5 million b/d, prices will move on after the OPEC+ meeting and start tracking the bubbling optimism over the economic climate and over rising oil demand,” said Hari.
Meanwhile, API data, released on March 2, showed a massive 7.36 million barrel build in US crude inventories during the week ended Feb. 26. The impact of the build in US crude inventories however was somewhat offset by large draws in US product inventories, with gasoline inventories and distillate inventories plummeting 9.93 million barrels and 9.053 million barrels respectively.
Market participants will now be looking towards more comprehensive inventory data from the US Energy Information Administration, scheduled to be released later on March 3.
