Singapore — 0255 GMT: Crude oil futures ticked lower during mid-morning Asian trade April 28, as data from the American Petroleum Institute showed a build in US crude inventories, and the OPEC+ Joint Ministerial Meeting Committee recommended to uphold the earlier OPEC+ decision to increase production from May onwards.
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Register NowAt 10:55 am Singapore time (0255 GMT), the ICE Brent June contract fell 6 cents/b (0.09%) from the April 27 settle at $66.36/b, while the June NYMEX light sweet crude contract was down 12 cents/b (0.19%) at $62.82/b.
Data from the API took the market by surprise as it showed a significant 4.32 million-barrel build in US crude inventories in the week ended April 23. Market analysts had expected a marginal draw in crude oil inventory amid an uptick in refinery demand.
A dip in sentiment was, however, tempered by indications that downstream demand remained strong, with US gasoline and US distillate inventories falling 1.29 million barrels and 2.42 million barrels, respectively.
Market participants will be looking to the more comprehensive US Energy Information Administration data, due to be released later April 28, for corroboration of the inventory changes, and for fresh pricing cues.
Meanwhile on April 27, the OPEC+ JMMC, co-chaired by Saudi Arabia and Russia, backed the coalition's earlier decision to gradually taper crude production cuts from May onwards, delegates told S&P Global Platts.
As per the decision reached during the April 1 OPEC+ meeting, the producer group is due to raise its collective output by 350,000 b/d in May, another 350,000 b/d in June, and 441,000 b/d in July. Saudi Arabia, which is currently in the middle of an additional 1 million b/d cut, will also ease the cut by 250,000 b/d in May, 350,000 b/d in June and 400,000 b/d in July.
Delegates said the full OPEC+ meeting scheduled for April 28 will also be canceled, and that ministers will convene online again on June 1 to review their decision.
The endorsement from the JMMC comes after the OPEC+ Joint Technical Committee had raised its 2021 crude demand growth forecast on April 26 from 5.6 million b/d to 6 million b/d, bringing it in line with the 5.95 million b/d forecasted in the April 13 OPEC oil market report.
The OPEC+ coalition's rosy demand outlook is predicated on robust vaccination programs in the US and Europe, which are expected to fuel their respective economic rebound. OPEC+ is confident that the increased demand brought upon by an economic expansion in these regions will outweigh the demand-destruction caused by an escalation of the pandemic in countries such as India, Japan and Turkey.
"OPEC+ highlighted signs of robust demand taking shape across major regions of the world. So much so that the Joint Ministerial Monitoring Committee recommended proceeding with plans to gently revive oil production," ANZ analysts said in an April 28 note.
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Crude oil slips on US stock build, OPEC+ JMMC endorses impending output rise - S&P Global
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