0242 GMT: Crude oil futures were mixed in mid-morning trade Sept. 8 as market participants assess the supply-demand fundamentals within the global crude complex even as lingering demand concerns continue to weigh heavily on market sentiment.
At 10:42 am Singapore time (0242 GMT), ICE Brent November crude futures were up 3 cents/b (0.07%) from the Sept. 7 settle at $42.04/b, while the NYMEX October light sweet crude contract was down by 67 cents/b (1.68%) at $39.10/b.
"Crude is taking its time to find a bottom. There are no factors on the horizon to spur a sharp rebound from the past two weeks of losses, hence the cautious inching up of Brent. WTI is simply catching up with Brent's slide on Monday [Sept. 7], when the US market was closed for trading," Vandana Hari, founder and CEO of oil consultancy firm, Vanda Insights told S&P Global Platts Sept. 8.
Meanwhile, the high inventories and weak refining margins for oil products are also encouraging US refineries to extend their scheduled maintenance at the end of the US driving season, which will further reduce refinery runs and crude demand in the near term.
Elsewhere, the cut in Saudi Aramco's official selling price for most grades of its crudes into the US and Asia for October suggests that demand recovery remains weaker than anticipated in these markets. In Asia, the differential for Arab Light was cut by $1.40/b to a discount of 50 cents/b against Oman/Dubai, Platts earlier reported.
"This is the first time since June that the Saudis have set this OSP at a discount to the Oman/Dubai benchmark. Clearly this suggests that the market is not tightening as quickly as many had anticipated, with supply edging higher, and with demand clearly faltering," ING analysts said in a Sept. 8 note.
However, the cuts were reportedly within market expectations, as Asian refineries continue to struggle with a slow recovery in cracking margins, with some said to maintain lower than optimum run rates.
"Oil market participants, like their cross-asset colleagues, are gradually beginning to reassess the carnage. And while short term downside risks always remain, the longer-term trend still points higher for oil prices, which should offer a modicum of support at current levels," Stephen Innes, chief global markets strategist at AxiCorp, said in a note Sept. 8.
Market participants will look to fresh cues from the inventory reports by the American Petroleum Institute and the US Energy Information Administration on Sept. 9 and 10, respectively.
