Crude stable as rising coronavirus cases offset US inventory draw

Singapore — 0230 GMT: Crude oil futures were largely steady in mid-morning trade in Asia July 30, as a sharp uptick in global coronavirus cases overrode a deep decline in US inventory stocks.

At 10:30 am Singapore time (0230 GMT), ICE Brent September crude futures was up 5 cents/b (0.11%) from the July 29 settle at $43.80/b, while NYMEX September light sweet crude contract was up by 5 cents/b (0.12%) at $41.32/b.

US crude oil inventories fell sharply during the week ended July 24 as exports and refinery demand climbed to multi-month highs, US Energy Information Administration data showed July 29.

However, total gasoline stocks climbed 650,000 barrels to 247.39 million barrels, pushing inventories to 7.9% above the five-year average while nationwide distillate inventories were also up 500,000 barrels at 178.39 million barrels, about 26% above the five-year average and notably, a fresh 38-year high.

"The mild market reaction to a huge inventory draw suggests that the gasoline inventory glut is providing the poor eye candy," Stephen Innes, chief global markets analyst at AxiCorp, said in a note July 30.

"Given how noisy this data set has been of late, that traders would rather wait before jumping for the inventory prints to flesh out a more convincing two- to four-week trend," he added.

Meanwhile, the US Federal Reserve Federal Open Markets Committee, in a move the market widely expected, held its target interest rate flat at 0-25 basis points Wednesday and extended its securities purchasing programs.

Globally, rising coronavirus infections and record daily fatalities in some US states continued to weigh on market sentiment. The number of total confirmed infections worldwide currently stands at 16.96 million, latest data from John Hopkins University showed. Cases remained high in US, Brazil and India, and combined, they account for about 50% of the worldwide infections.

In US, deaths from the coronavirus have surpassed 150,000. California, Texas and Florida -- the three most populous state in the US -- each reported a new single-day record of daily fatalities, according to media reports.

"The continued COVID-19 spread and rising fatalities remains a prevalent issue dragging on sentiment and more broadly capping further gains for crude oil prices from the current consolidation," Pan Jingyi, market strategist at IG, said July 30.