- Crude oil futures were higher in mid-morning Asian trade April 21 amid still tight supply fundamentals.
- As a result, sentiment receives an extra boost from draws in US crude and refined product stocks last week.
A recent news article published in the Platts states that crude oil futures climb after draws in US crude, product stocks.
ICE June Brent futures
At 10:15 am Singapore time (0215 GMT), the ICE June Brent futures contract was up $1.28/b (1.2%) from the previous close to $108.08/b, while the NYMEX June light sweet crude contract rose $1.11/b (1.09%) at $103.30/b.
Total US commercial crude stocks fell 8.02 million barrels to 413.73 million barrels in the week ended April 15, US Energy Information Administration data showed April 20, leaving inventories nearly 15% behind the five-year average for this time of the year.
US crude exports surged
The draws come as US crude exports surged 2.09 million b/d to 4.27 million b/d, the highest since March 2020 and only the third time since the start of the pandemic that exports have crossed above the 4 million b/d level.
Total gasoline stocks drew 760,000 barrels during the week to 232.38 million barrels and now stand around 3% below the five-year average for this time of the year.
Nationwide distillate stocks fell 2.66 million barrels to 108.74 million barrels.
“EIA weekly numbers were constructive with US commercial crude oil inventories declining by 8.02 million barrels over the last week, which would be the largest weekly decline in crude inventories since January 2021,” said ING analysts Warren Patterson and Wenyu Yao in an April 21 note.
“Given the structural changes we are seeing in the global oil market regarding Russian supply, along with the expected growth in US crude oil output, we would expect that the US becomes an even larger net exporter of oil and products in the months and years ahead,” they added.
Bullish for oil prices
Fundamentals remained bullish for oil prices, analysts maintained, as European Union nations continued to signal a complete cessation of Russian energy imports.
While it is unlikely that EU nations will announce an outright ban on Russian energy, German officials have said they intend to phase out Russian oil imports by the end of this year.
“Comments from [the German foreign minister and finance minister] suggest that we can probably rule out the EU putting an immediate ban in place against Russian oil. More likely will be a gradual phasing out of Russian oil, much like we are seeing with coal,” said Patterson and Yao.
“A gradual phasing out would give time for trade flows to adjust in a more orderly fashion and so the impact on price would be more limited compared to an immediate ban,” they added.
Dubai crude swaps were higher
Dubai crude swaps were higher in mid-morning trade in Asia April 21 from the previous close, though intermonth spreads were lower.
The June Dubai swap was pegged at $102.03/b at 10 am Singapore time (0200 GMT), up 41 cents/b (0.4%) from the April 20 Asian market close.
The May/June Dubai swap intermonth spread was pegged at $1.75/b at 10 am, down 27 cents/b over the same period, and the June-July intermonth spread was pegged at $1.49/b, down 13 cents/b.
The June Brent/Dubai EFS was pegged at $5.80/b, down 70 cents/b.
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Source: Platts
