Crude oil futures were higher during mid-morning trade in Asia Tuesday amid an expected draw in the US’ crude inventory last week, while news on Iranian sanctions and OPEC meeting in April also kept prices supported. At 11:03 am Singapore time (0303 GMT), ICE March Brent crude futures were up 65 cents/b (1.10%) from Monday’s settle at $59.64/b, while the NYMEX February light sweet crude contract moved 57 cents/b (1.13%) higher at $51.08/b. Analysts surveyed Monday by S&P Global Platts were looking for US crude stocks to have declined by 250,000 barrels for the week ended January 12. An expected uptick in US exports likely contributed to the crude draw last week, analysts said.
Product inventories on the other hand are expected to continue to build, with gasoline inventory expected to rise by 2.6 million barrels and distillate stocks to have risen by 900,000 barrels last week. Preliminary data on US crude inventory is due for release from the American Petroleum Institute later Tuesday, while the more definitive numbers are due for release from the US Energy Information Administration later Wednesday.
Elsewhere, the US’ special representative for Iran, Brian Hook, told Platts on Monday that the US can still contain global oil prices despite sanctions on Iran’s oil, given the potential for the continued surge in US oil growth and increased supplies from other key producers such as Saudi Arabia. S&P Global Platts Analytics expects US oil production to swell to an 11.3 million b/d average this year, up nearly 12% from 10.9 million b/d in 2018.
As OPEC and its allies implement production cuts to bolster prices, US officials say they will be closely monitoring the market in considering whether to extend waivers that allow eight countries to continue buying Iranian oil. The waivers for China, Greece, India, Italy, Japan, Taiwan, Turkey and South Korea expire in May.