OIL FUTURES: Crude climbs up on prospective drawdown of US inventories

Crude oil futures rose in early Asia trading Oct. 30 on expectations of declining US inventories.

At 12:06 pm Singapore time (0406 GMT), the ICE December Brent futures contract gained 38 cents/b (0.53%) from the previous close at $71.50/b while the NYMEX December light sweet crude contract rose 44 cents/b (0.65%) at $67.65/b.

US crude inventories are expected to dip 573,000 barrels in the week ended Oct. 25, data from the American Petroleum Institute showed late Oct. 29.

Analysts surveyed by S&P Global Commodity Insights on Oct. 28 had anticipated US crude stockpiles to rise 800,000 barrels over the same period amid an expected downturn in refinery demand.

More definitive numbers are due for release by the US Energy Information Administration Oct. 30.

Consumer confidence had also gained, with the US Conference Board’s October consumer confidence measure up 9.5 points to 108.7 -- its largest increase since March 2021.

“Notably, the proportion of consumers anticipating a recession over the next 12 months dropped to its lowest level since the question was first asked in July 2022,” ANZ Research analysts, Brian Martin and Daniel Hynes, said in a note Oct. 30.

Tensions in the Middle East are expected to continue supporting crude fundamentals in the near term, even as war premiums have eased.

Middle East crude oil supply risks are likely to persist despite an apparent easing of Israel-Iran tensions, but near-term volatility could remain subdued before the Nov. 5 US presidential election, geopolitical experts said.

Fed’s 'soft-landing' in focus

The September JOLTS report showed that job vacancies in the US fell to 7.443 million, which was less than market expectations and 400,000 lower than the downward revision of 7.861 million reported for August.

“While no one wants a cliff-drop in job openings, gradual declines still feed the “soft landing” narrative that investors and the Fed are both hungry for,” SPI Asset Management’s Managing Partner Stephen Innes said Oct. 30.

With the Federal Reserve opting for a slow easing in interest rate, the dollar is expected to continue remaining firm.

An appreciating dollar had caused dollar-denominated assets such as oil to become more expensive to consumers using foreign currencies.

The ICE US Dollar Index stood at 104.15 at 10:32 am Singapore time (0232 GMT) on Oct. 30 climbing 3.19% since the start of October.

Dubai swaps

Dubai crude swaps dipped in early Asia trade Oct. 30 from the previous close, while the intermonth spreads remained stable.

The December Dubai swap was pegged at $69.78/b at 11 am Singapore time (0300 GMT), falling 24 cents/b (0.34%) from the Oct. 29 Asian market close.

The November-December Dubai swap intermonth spread inched down 2 cents/b at 16 cents/b at 11 am over the same period, and the December-January spread was at plus 43 cents/b, steady on the day.

The December Brent-Dubai exchange of futures for swaps was pegged at $1.60/b, sinking 13 cents/b from the previous Asian close.