MW: Oil drifts lower as traders focus on supply overhang
Oil prices rose in Asia trade on Thursday as a buildup in weekly U.S. oil stockpiles showed the smallest increase since stocks began rising at the end of September.
U.S. weekly inventories of crude oil rose by around 0.25 million barrels, far less than market expectations of above 2 million barrels, said Daniel Ang, investment analyst at Phillip Futures Limited.
The rise in crude oil inventories followed routine maintenance shutdowns by refiners who process the oil into products, as well as being due to a seasonal slowdown. But the weekly stockpiles have now started to fall as refineries increase their utilization rates as well as lower imports, said Ang. See Wednesday’s action
He said the lower inventory level is giving some support to prices, though prices are likely to be range-bound through the rest of the week as the overall mood is bearish because of a supply overhang.
An ANZ report said that U.S. refineries in both the Midwest and Gulf Coast are boosting utilization--which will more than offset an increase in West Coast maintenance during the next two weeks.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December CLZ5, -1.33% traded at $41.05 a barrel, up 19 cents in the Globex electronic session. January Brent crude LCOF6, -0.27% on London’s ICE Futures exchange rose 40 cents to $44.56 a barrel.
Nymex reformulated gasoline blendstock for December RBZ5, +1.84% — the benchmark gasoline contract — rose to 1.2913 cents a gallon from 1.2661 cents.
ICE gasoil for December changed hands at $427.25 a metric ton, up $4.75 from Wednesday’s settlement.
