Singapore—0232 GMT: Crude oil futures moved lower during mid-morning trade in Asia Nov. 18, after data from the American Petroleum Institute showed a build in US crude inventories, and after the Joint Ministerial Monitoring Committee (JMMC) failed to make definite statements on the status of OPEC+ production cuts.
At 10:32 am Singapore time (0232 GMT), ICE Brent January crude futures were down 15 cents/b (0.34%) from the Nov. 17 settle at $43.60/b, while the NYMEX December light sweet crude contract was down 24 cents/b (0.58%) at $41.19/b.The lower crude prices were seen after API data showed Nov. 17 that crude inventories rose by 4.174 million barrels in the week ended Nov. 13.
Fundamentals in the downstream gasoline markets were also unimproved, with API data showing a 256,000-barrel build in gasoline inventories in the week ended Nov. 13. The one positive from the API report was a 5.024 million-barrel draw in distillate inventories.
At 10:32 am Singapore time, the NYMEX December RBOB contract was trading 0.38 cent/gal (0.33%) lower than the Nov. 17 settle at $1.1494/gal and the NYMEX December ULSD contract was down by 0.12 cent/gal (0.10%) at $1.2379/gal.
Pan Jingyi, senior market strategist at IG, acknowledged that the bearish API data had dampened sentiment this morning, and added, "The market is taking a breather after a vaccine-driven rally, and reassessing the situation on the pandemic front, as infection numbers have been rising the past couple of days."
Meanwhile, a Nov. 17 JMMC meeting did not inspire any confidence in the market, as it failed to offer any insight as to whether the OPEC+ alliance will extend its current production cuts into next year.
Based on prior hints from key figures within OPEC+, the market believes that the alliance will extend its output cuts of 7.7 million b/d by at least three months, instead of easing them to 5.8 million b/d as planned from January 2021 onward.
The market was expecting more definitive statements on the status of the production cuts from the meeting, but delegates told S&P Global Platts that OPEC+ will announce its decision when it convenes online from Nov. 30-Dec. 1.
"While OPEC+ can extend the current cuts at its next full meeting on Nov. 30, it may well be viewed as a disappointment that we did not hear something more explicit today, especially in the context of a market that, on the margin, is still hopeful that additional cuts in 2021 will be at least put on the table," Stephen Innes, chief global market strategist at Axi, said in a Nov. 18 note.
Even though there was no production guidance, the JMMC reaffirmed the OPEC+ alliance's resolve to balance demand with supply in the oil market.
Saudi energy minister Prince Abdulaziz bin Salman said in his opening remarks: "We must maintain high compliance while retaining the flexibility and nimbleness to adjust our commitment in changing market conditions ... we must be prepared to act according to the requirements of the market."
