Crude oil futures were lower during mid-morning trade in Asia Thursday after a build in US crude stocks as ongoing global supply concerns blunted further declines. At 10:45 am Singapore time (0245 GMT), December ICE Brent crude futures were down 18 cents/b (0.22%) from Wednesday’s settle at $79.87/b, while the NYMEX November light sweet crude contract was down 15 cents/b (0.22%) at $69.6/b. US commercial crude stocks rose 6.49 million barrels to a 15-week high of 416.44 million barrels in the week ended October 12, US Energy Information Administration data released Wednesday showed. Analysts surveyed Monday by S&P Global Platts had been expecting a more modest 1.88 million barrel build.
The jump was attributed to a sharp decline in exports, which fell 30.8% on week to 1.78 million b/d in the week, the EIA data showed. “The [EIA] figures will be distorted considerably by Hurricane Michael and should therefore not be overinterpreted,” Commerzbank analysts said in a note. “Roughly 40% of US oil production in the Gulf of Mexico had been shut down for three days, resulting in a good 2 million barrels less crude oil being produced,” they added. US crude production fell 300,000 barrels to 10.9 million b/d in the week from a record high of 11.2 million b/d the week before, the EIA data showed.
The fall in exports came despite a widening Brent/WTI spread, which increases the competitiveness of US grades in Europe. The December Brent/WTI spread settled at $10.35/b Wednesday, the widest since June 11, when it was $10.43/b, and stood at $10.27/b at 0240 GMT. Meanwhile, supply concerns in the leadup to US sanctions on Iran snapping back November 5 continue to keep prices supported, analysts said.