Singapore — Crude oil futures were lower during mid-morning trade in Asia Monday, amid a build reported in US oil rig count data last week, while the latest report on oil demand forecasts also cast a bearish light on prices.
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At 11:00 am Singapore time (0300 GMT), June ICE Brent crude futures inched down 12 cents/b (0.17%) from Friday's settle at $71.43/b, while the NYMEX May light sweet crude contract moved 24 cents/b (0.38%) lower at $63.65/b.
Data released by Baker Hughes on Friday showed that the US rig count had inched up by two for the week ended April 10, bringing the total to 835. Data from S&P Global Platts Analytics had expected oil rigs to have dropped by 10 to 867 last week.
Meanwhile, the International Energy Agency's executive director Fatih Birol on Friday said that current oil prices above $70/b are starting to have their impact on global demand.
"The higher oil price environment may, if they stay around this level, also have an impact ... put some downward pressure under demand growth," Birol told S&P Global Platts in an interview.
"So it will not be a surprise if we are to revise our demand numbers in the next edition of the oil market report if the prices remain at these levels, " he added.
The IEA has kept its forecast for global oil demand unchanged at 1.4 million b/d for 2019, but warned that rising oil prices could start to threaten demand in Asia, especially in a country like India. which is starting to feel the pinch already, Birol said.
The risk of a price impact on oil demand is exacerbated by broader signs of a global slowdown in economic growth, with indicators in China pointing to the weakest growth in the last three decades, Birol noted.
Meanwhile, Libya's oil industry remains on high alert as the Libyan National Army's effort to capture the west of the country increases the risk of prolonged conflict, putting the country on the brink of civil war.
"Libyan rebel leader Khalifa Haftar moved forces closer to Tripoli. This raises the question of whether the surge in crude oil output achieved over the past couple of years is sustainable," ANZ analysts said in a note Monday.
The risk of oil supply outages is growing markedly, not only in the west of Libya, where the LNA is trying to gain ground, but also in the key eastern ports, which it already controls.
"Previous attempts by Haftar to gain control in Libya have seen oil facilities affected. The latest moves appear to be directed towards gaining control of the country's major institutions based in the capital. However, it does not lessen the potential impact on oil production," ANZ analysts added.
"Oil prices look poised to remain rangebound as market sentiment swings between tighter market fundamentals and global growth worries in the current term," said Benjamin Lu, investment analyst at Phillip Futures.
As of 0300 GMT, the US Dollar Index was down 0.09% at 96.47.
--Avantika Ramesh, firstname.lastname@example.org
--Edited by Geetha Narayanasamy, email@example.com