Crude oil futures edged lower during mid-morning trade in Asia Wednesday in the wake of a bearish weekly report on US crude inventories as markets remained equally focused on potentially bullish developments in US-China trade talks and OPEC’s production cut agreement. At 10:40 am in Singapore (0240 GMT), ICE Brent December futures were down 26 cents/b (0.44%) from Tuesday’s settle at $59.44/b, while the new front-month NYMEX December light sweet crude futures contract was 38 cents/b (0.7%) lower at $54.10/b.
Analyst reports quoting American Petroleum Institute data released late Tuesday showed US crude inventories rose 4.45 million barrels in the week ended October 18 Analysts surveyed Monday by S&P Global Platts had been expecting a 4.7 million-barrel build. More definitive weekly US inventory data is due for release by the US Energy Information Administration later Wednesday.
The impact of the preliminary bearish US stocks report was blunted by potentially bullish news emerging amid positive developments in US-China trade talks and reports that OPEC was considering the possibility of deepening its ongoing supply cut. According to media reports, OPEC and its allies plan to mull the possibility of deepening their ongoing production cut agreement from December due to concerns around global demand and growth.
“There will also be a stronger adherence to current quotas, with countries such as Iraq and Nigeria failing to comply with pledged output reductions,” ANZ analysts said in a note Thursday, referring to OPEC and its allies. Earlier this week some optimism emerged from ongoing trade talks between the US and China after US President Donald Trump said he was seeing progress in the talks and signaling a possible sealing of an agreement at the Asia-Pacific Economic Cooperation summit in Santiago, Chile, on November 16.