New York —
0241 GMT: Crude oil futures rose during mid-morning trade in Asia Sept. 16 as sentiment was boosted by better-than-expected economic data from the US and China.
At 10:41 am Singapore time (0300 GMT), ICE Brent November crude futures were up 48 cents/b (1.18%) from the Sept. 16 settle at $41.01/b, while the NYMEX October light sweet crude contract was 54 cents/b (1.41%) higher at $38.82/b.
“A string of better-than-expected economic data from the world’s two largest oil consumers, the US and China, fanned optimism that the economic recovery was outpacing forecasts, triggering a bump in the current slump, which sent oil prices to their highest level in over a week,” Stephen Innes, chief global markets strategist at AxiCorp, said in a Sept. 16 note.
Oil prices had moved higher overnight following a larger than expected decline in crude oil stocks in the US. Data from American Petroleum Institute showed US crude stocks plunged 9.5 million barrels in the week ended Sept. 11, almost five times larger than the 1.8 million-barrel decline expected by analysts surveyed by S&P Global Platts on Sept. 14.
In addition, China’s industrial production and retail sales surpassed analyst expectations, rising 5.6% and 0.5% respectively year on year in August, according to data released by the country’s National Bureau of Statistics Sept. 15.
“With the economic engines in the industrial heartlands in the US and China starting to fire on all cylinders, its temporarily offsetting the slump in crude prices that began in the closing week of the US driving season,” Innes said.
Oil prices rose even as the International Energy Agency revised lower its 2020 oil demand outlook Sept. 15, a day after OPEC released a similar downward revision.
The IEA now expects global oil demand to average 91.7 million b/d in 2020, down 300,000 b/d from its earlier forecast, and equating to a contraction of 8.4 million b/d on the year.
The agency cited renewed concerns around the coronavirus pandemic, pointing to the approaching winter in the Northern Hemisphere as being “uncharted territory” for the virus and posing huge challenges in key demand hubs.
IEA sees oil demand climbing 5.5 million b/d in 2021 to around 97.1 million b/d.
Elsewhere, the OPEC+ Joint Ministerial Monitoring Committee is set to meet Sept. 17, where a review is expected on production cut compliance.