Singapore — Crude oil futures were lower during mid-morning trade in Asia Tuesday as the impact of Storm Barry started to taper off amid a return of normal production and refining operations in the US Gulf Coast.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
Markets were now looking ahead for US inventory data to provide fresh price direction, analysts said.
At 10:30 am Singapore time (0240 GMT), front-month ICE Brent September futures slipped 10 cents/b (0.15%) from Monday's settle at $66.38/b, while the NYMEX August light sweet crude futures contract was 14 cents/b (0.23%) lower at $59.44/b.
"Aside from US Gulf hurricanes and the lingering tensions in the Middle East, we've entered the slow news season and crude has slipped into a holding pattern," said Vandana Hari, founder of Vanda Insights.
Hurricane Barry was moving well inland as a tropical depression Monday after having made landfall on the Louisiana coast midday Saturday with winds barely meeting hurricane criteria.
The storm "is fading as a tropical system" into what the National Weather Service calls a "remnant low," the agency said Monday on Twitter.
"Supply concerns from the diminishing impact of tropical storm Barry and a deteriorating demand outlook can be seen taking a toll on prices, likewise weighing on energy stocks," said Pan Jingyi, IG market strategist.
China's National Bureau of Statistics Monday said the country's first-half gross domestic product rose 6.3% year on year, while its second-quarter GDP rose 6.2% year on year.
Both reflected the slowest year-on-year pace of growth since 1993.
"While prices do look to be attempting to form a higher low here and have yet to exhaust the uptrend, there appears a lack of strong factors to swing prices higher," she added.
"Investors are still focused on the lingering demand concerns and likelihood of the market becoming oversupplied next year. The market will take further cue from the US oil inventories data, which could keep prices resilient," said ANZ analysts in a note.
Analysts surveyed Monday by S&P Global Platts were looking for US commercial crude inventories to have dipped by 4.2 million barrels for the week ended July 12.
They attibuted the sharp decline to production shut-ins in the Gulf of Mexico ahead of Hurricane Barry.
"To some extent, a drop in US crude stocks last week would have been factored in, on account of Hurricane Barry. But if we see something much larger than expected, it could mean another leg up for crude," said Hari.
Distillate stocks likely edged around 300,000 barrels higher last week to 130.8 million barrels , while US gasoline inventories were expected 1.5 million barrels lower last week at around 227.7 million barrels, analysts said.
Preliminary data on last week's inventory data is due for release from the American Petroleum Institute later Tuesday, while the more definitive numbers are due for release from the US Energy Information Administration later Wednesday.
As of 0230 GMT, the US Dollar Index was up 0.01% at 96.58.
--Avantika Ramesh, email@example.com
--Edited by Nurul Darni, firstname.lastname@example.org