Crude oil futures steady on lack of new drivers; supported by bullish outlook

0311 GMT: Crude oil futures were steady during mid-morning Asian trade June 22 in the absence of new developments, although bullish demand outlooks continue to support the market.

At 11:11 am Singapore time (0311 GMT), the August ICE Brent crude futures contract was up 23 cents/b (0.31%) from the previous settle at $75.13/b, while the NYMEX July light sweet crude contract slipped 2 cents/b (0.03%) at $73.64b.

The stability in prices this morning comes after both markers closed at landmark highs on June 21. The front month ICE Brent marker closed at $74.90/b, the highest on record since Oct. 31, 2018, while the front month NYMEX light sweet crude marker closed at $73.60/b, the highest since Oct. 9, 2018.

Market analysts attributed the elevated crude prices to a US-led recovery in global demand.

In the US, analysts surveyed by S&P Global Platts said they expected a 0.5 percentage point increase in refinery utilization to 93.1% of total capacity to have pushed commercial crude stocks 6.3 million barrels lower in the week ended June 18. Such a draw would have left stocks 5.5% behind the five-year average of US Energy Information Administration data at 460.4 million barrels, they said.

The increase in refinery utilization is driven by strong downstream products demand.

Apple Mobility data showed US driving activity pushed to around 164% of the index's January 2020 baseline in the week ended June 18, up six percentage points from the week prior and a fresh record high for the dataset.

Furthermore in an encouraging sign for distillate demand, Apple data also showed US transit ridership averaging 95% of baseline last week, the highest since the first week of March 2020.

ANZ analysts also noted that demand for aviation travel in the US was also on an uptrend, providing further thrust to the crude complex.

"The number of people traversing through [Transportation Security Administration] checkpoints hit 2.1 million on Sunday [June 20], the highest level since the start of the pandemic," they said in a June 22 note.

The market will be looking forward to comprehensive inventory data from the American Petroleum Institute and the US Energy Information Administration, due for release June 22 and June 23, respectively.

Moving away from the US, rising vaccination rates and easing mobility restrictions in much of Europe also portend well for oil demand, which is expected to receive another boost as the pandemic situation in key Asian economies such as India and Japan abate.

The rosy demand outlook has led to several investment banks becoming more bullish on oil. Morgan Stanley, on June 18, revised its forecast for Brent for the second half of 2021 to $77.50/b from its previous estimate of $67.50/b, whereas Goldman Sachs said that global oil demand likely hit 97 million b/d in recent days, up from 95 million b/d a few weeks ago.

Meanwhile, analysts at Bank of America said on June 21 that Brent prices should average $68/b in 2021, and touched on the possibility of tightened supply and demand balances pushing oil to the $100/b level in 2022, Platts reported previously.