Crude oil futures tick up on bullish API data, refinery activity

Singapore — 0245 GMT: Crude oil futures ticked higher during mid-morning Asian trade Oct. 15, as positive data from the American Petroleum Institute and an increase in China's and India's refinery activities stoked bullish market sentiment despite tightening coronavirus restrictions.

At 10.45 am Singapore time (0245 GMT), ICE Brent December crude futures were up 6 cents/b (0.14%) from the Oct. 14 settle to $43.38/b, while the NYMEX November light sweet crude contract was up 4 cents/b (0.10%) at $41.08/b. Both international crude markets had jumped 2.05% and 2.09% to settle at $43.32/b and $41.04/b, respectively, on Oct. 14.

The uptick in prices can be attributed to positive API data released late Oct. 14, which showed that US crude inventories had declined 5.4 million barrels to 495.4 million barrels in the week ended Oct. 9. This large draw in crude stocks far exceeded analysts' expectations of a 2.3 million barrel draw, according to an S&P Global Platts survey.

The API also reported a 1.513 million-barrel and a 3.930 million-barrel draw in US gasoline and distillate inventories, respectively, indicating that fundamentals in downstream oil markets were improving.

At 10.45 am Singapore time, the NYMEX November RBOB contract was trading 0.0011 cents/gal (0.09%) higher from the overnight settle at $1.1982/gal and November ULSD contract was 0.17 cents/gal (0.14%) higher at $1.1942/gal.

An added boost to market sentiment were indications that demand in Asia's oil-consuming behemoths China and India were on the mend.

Data collected by Platts on Oct. 14 showed that crude and bitumen blend imports by independent Chinese refineries were up 1.6% to 18.14 million mt, or 4.43 million b/d, in September, from a three-month low of 17.85 million mt in August. Earlier, data from the Chinese customs released Oct. 13 had also shown that the country's crude imports were up 2.1% on the month and 17.6% year on year to 48.5 million mt in September.

Meanwhile, Indian demand was also on the rise according to ANZ analysts in an Oct. 15 note: "India's refiners have boosted buying ahead of two main festivals, Navratri and Diwali, that typically increase demand for consumer goods and transportation fuel."

However, capping oil markers was the demand outlook, which remained bleak amid the coronavirus pandemic, as France declared a state of emergency late Oct. 14. and became the latest in a growing list of countries that are imposing tougher restrictions to stem the spread of the virus.

Edward Moya, senior market analyst at OANDA, said in an Oct. 15 note: "The COVID-19 second wave in Europe is getting out of control and that should force further action from lawmakers and central banks...It will be hard for risk appetite to return as Europe continues to go down the path of lockdowns."