Crude oil futures fell during mid-morning trade in Asia Sept. 17 despite the draw on US’ crude inventories, as the market awaited news from the impending OPEC+ meeting.
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At 11.23 am Singapore time (0323 GMT), ICE Brent November crude futures were trading at $41.63/b, down 59 cents/b (1.47%) from the Sept. 16 settle, while the NYMEX October light sweet crude contract was at $39.53/b, down 63 cents/b (1.49%).
The decline comes after both crude oil markers surged $1.69/b and $1.88/b, respectively, overnight after the US Energy Information Administration released data showing that US commercial crude inventories had declined 4.39 million barrels during the week ended Sept. 11.
“Following yesterday’s API draw of 9.5 million barrels, some energy traders were not impressed with the EIA report of a 4.4 million drop in stockpiles,” Edward Moya, senior market analyst from OANDA, said in a Sept. 17 note.
In the same note, Moya said: “WTI crude is back above the $40/b level, but it might struggle here as energy traders start to doubt that the OPEC+ deal will last much longer. The Saudis are not going to save the day and the lack of compliance with the cheaters, UAE and Iraq, will mean oversupply concerns are possibly just around the corner.”
OPEC and its allies will have an online monitoring meeting on Sept. 17 to assess the situation, and determine whether their current production cuts are sufficient to prevent an oil supply glut amid increased expectations of non-OPEC supply.
Analysts have indicated that they expect the meeting to yield little change with focus primarily on compliance.
“Beyond reaffirming compliance and perhaps some resolution on catching up on quota volumes, we should expect limited new news and certainly nothing to significantly bump the crude market out of its current funk and push Brent back to $45/b,” Stephen Innes, chief global markets xtrategist at AxiCorp, said in a Sept. 17 note.