By Srinivas Chowdary Sunkara // petrobazaar // 2nd Sep, 2020.
Yesterday, Brent Oil futures for Oct delivery rose 30 cents or 0.66% to close at $45.58 on London based ICE futures Europe exchange. WTI oil futures to be delivered in Oct edged 15 cents up at $42.76 a barrel on NYMEX last night. In Shanghai, Crude oil main contract futures prices slipped 3.2 Yuan or above 1% to 294.8 Yuan/barrel while MCX crude oil Sep month contract futures inched Rs.6 down to Rs.3139 a barrel yesterday. Brent traded at a premium of $2.82 over WTI during the session.
The world crude oil price indices are demonstrating upward trend today following the optimism across the market boosted the risk appetite of trader today. Acceleration of U.S manufacturing activity coupled with expanding China's factory activity boosted the oil prices. On the weekly data side, API reported bigger than expected weekly draws in U.S stocks that signal demand recovery buoyed by economic activity. API reported late Tuesday that U.S crude stock piles down by 6.4 Mb, Gasoline stocks dipped by 5.8Mb while distillates are reported to be edged lower by 1.4 Mb. EIA will confirm the numbers later today. Consensus is on draws. Turning to supplies, OPEC oil output rises 950,000 Bpd MOM to 24.27 Mbpd as OPEC+ eases supply cuts since last month.
On the technical front, John Kemp reported that Hedge funds and other money managers sold the equivalent of 10Mb in the six most important petroleum futures and options contracts in the week to Aug 25, that reversed purchase of 12 Mb the week before. The over all position has not changed significantly since mid-July. Fund managers continued to sell crude and buy fuels. Depressed refining margins are unlikely to be sustainable, suggesting fuel prices will perform more strongly than crude in the medium term as per Kemp. Today, Oil benchmark futures are trading in green at the time of reporting. EIA numbers are awaited later today which may spur some volatility.
Good day to all.
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