- Crude oil futures fell during midafternoon trade in Asia Nov. 12
- The US recorded its highest inflation rate in 31 years. Data from the Bureau of Labor Statistics showed Nov. 10
- Market watchers were awaiting moves from the Biden administration on a possible release of SPR crude in a bid to combat high gasoline prices.
Crude oil futures fell during midafternoon trade in Asia Nov. 12 on profit-taking activity following uncertainty about any US intervention to curb rising oil prices, including releasing some of its Strategic Petroleum Reserve, says an article published on their S&P global website.
Crude oil futures fell during midafternoon trade
At 2:59 pm Singapore time (0659 GMT), the ICE January Brent futures contract was down 68 cents/b (0.82%) from the previous settle at $82.19/b while the NYMEX December light sweet crude contract was 62 cents/b (0.76%) lower at $80.97/b.
“The uncertainty over how US may intervene to curb elevated oil prices may draw some profit-taking, coming off the back of a stronger US dollar and virus resurgences in China and Europe, which may dampen some sentiments on eventual reopening,” IG market strategist Yeap Jun Rong told S&P Global Platts Nov. 12.
Some analysts have talked about the buildup of a risk-off sentiment as there were few events to move markets at the end of the week, particularly after recent headlines of higher-than-expected US inflation numbers weighing on investors’ minds.
Stronger dollar index
The US recorded its highest inflation rate in 31 years. Data from the Bureau of Labor Statistics showed Nov. 10 that consumer prices rose 6.2% year on year and 0.9% month on month.
This has also led to a stronger dollar index, which in turn impacted oil prices.
At 2.59 pm in Singapore, the Dollar Index was trading at 95.20, up 0.02% from the previous close at 95.18.
Awaiting moves from the Biden administration
Market watchers were awaiting moves from the Biden administration on a possible release of SPR crude in a bid to combat high gasoline prices, which might stem rising oil prices.
“US President Biden is facing pressure from fellow Democrats to address high gasoline prices with measures such as a ban on oil exports. He is still weighing the merits of an emergency release of crude from strategic reserves,” ANZ research analysts said.
Echoing a similar sentiment, UOB Market Research has said that traders have remained concerned about whether the Biden administration would intervene to cool rising energy prices in response to growing political pressure, including from his own party.
OPEC alliance released its latest monthly market report
Meanwhile, the OPEC+ alliance released its latest monthly market report late Nov. 11 that saw only marginal changes to supply and demand estimates for both this year and next. The group has downgraded its 2021 global oil demand forecast by 160,000 b/d.
“Global oil demand growth for 2021 was revised lower by 160,000 b/d to 5.65 million b/d, leaving demand to average 96.44 million b/d over the year,” NG analysts Warren Patterson and Wenyu Yao said, adding that the slight revisions lower were driven by lower-than-expected demand from China and India over the third quarter of 2021.
The group also cut its demand estimates for the final quarter of this year, expecting that high energy prices will have a dampening impact on demand.
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Source: S&P global
