Crude oil futures steady as risk sentiment remains firm despite US stock build

Crude oil futures were largely steady in mid-morning trade in Asia Nov. 25 as risk sentiment remained firm despite a build in US crude oil stocks in data released overnight.

At 10:25 am Singapore time (0225 GMT), the ICE January Brent futures contract was up 4 cents/b (0.05%) from the previous close at $82.29/b, while the NYMEX January light sweet crude contract was 3 cents/b (0.04%) lower at $78.36/b.

Total US commercial crude stocks rose 1.02 million barrels to 434.02 million barrels in the week to Nov. 19, the US Energy Information Administration said Nov. 24, leaving stockpiles around 7.2% behind the five-year average for this time of year.

US gasoline stocks fell 600,000 barrels to 211.39 million barrels, falling 5.2% behind the five-year average, while total distillate stocks fell 1.97 million barrels to 121.72 million barrels, the EIA data showed.

Demand was seen higher in the US across all major refined products, with both gasoline and distillate consumption rising around 1% on the week to 9.33 million b/d and 4.39 million b/d, respectively.

"Overall, it was a fairly neutral report from the EIA," ING analysts Warren Patterson and Wenyu Yao said in a note.

Investors will likely remain bullish on crude oil in the near term after announcements of strategic petroleum reserve releases by major oil-consuming countries fell far short of expectations, sending oil prices shooting higher by more than 3%.

Colder weather in several parts of Asia will also keep a floor under energy prices, analysts said.

"Reports of colder weather in Asia are likely to see coal and LNG markets remain well bid in the lead-up to winter," ANZ Research's Brian Martin and Daniel Hynes said in a note.

Nonetheless, more supply is set to come out of Nigeria, with European oil major Shell on Nov. 24 lifting a force majeure on loadings of the country's key Bonny Light crude after exports were disrupted for almost a month due to the shutdown of the Nembe Creek Trunk line.

Loading volumes of Bonny Light hovered around 120,000 b/d prior to the disruption, though the most recent January loading program released before the force majeure was lifted showed a loading volume of around 30,000 b/d for that month.

Some headwinds could also come from a stronger dollar, with the currency notching fresh highs overnight as latest data showed the US Federal Reserve's preferred inflation measure hitting a three-decade high in October.

"The dollar is surging after a wrath of US economic data showed the economy continues to head in the right direction, prompting expectations for a faster taper and possibly three Fed rate hikes next year," OANDA senior market analyst Edward Moya said.

As of 1025 GMT, the December US dollar index was down 0.08% at 96.765.