Singapore — 0305 GMT: Crude oil futures were steady in mid-morning trade in Asia Aug. 24 as investors await fresh cues on demand and supply, including the OPEC+ compliance adjustments, and amid uncertainty over the US Federal Reserve's policy.
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Register NowAt 11:04 am Singapore time (0305 GMT), the ICE Brent October crude futures was unchanged from the Aug. 21 settle at $44.35/b, while the front-month NYMEX October light sweet crude contract was up by 2 cents/b (0.05%) at $42.36/b.
"Asian markets are broadly expected to meander along the countervailing flows of mixed growth and COVID-19 developments going into the fresh week, seeing to a muted commencement," wrote Pan Jingyi, market strategist at IG, in an Aug. 24 report.
A ceasefire announced by Libya's Turkish-backed government with the Libya National Army could see the country's National Oil Corp resuming exports at a time when the OPEC +alliance is tapering production cuts, analysts said.
"With the markets moving into a soft contango and the front-month struggling to breakout topside even as broader risk market stabilize, traders have been reducing extended long position risk waiting for more precise signals on the OPEC catch up adjustment effects; the market hasn't turned bearish it is just not as bullish," Stephen Innes, chief global markets strategist at AxiCorp, said in a Aug. 24 note.
In the week ended Aug. 21, a key OPEC+ monitoring committee had given non-compliant members until Aug. 28 to submit plans to make their surplus production whole. This follows an easing of the coalition's production cuts to 7.7 million b/d from August.
OPEC+ members that had exceeded their production quotas in May, June and July will have to cut a combined 2.31 million b/d extra as compensation by the end of September.
Notably, Iraq and Nigeria were the two biggest laggards, overproducing by 851,000 b/d over the three months, while Nigeria was over its limit by 315,000 b/d.
Meanwhile, an upcoming symposium later this week could give clues to the US Federal Reserve's next move, analysts said.
Innes noted that uncertainty over the Fed's policy, "which has strengthened the US dollar and less optimistically for oil prices, is also clouding the viewfinder."
"A relatively quiet start to the week is noted with the month coming towards a close, watching the US Jackson Hole symposium into the latter half of the week with the western world for fresh leads here," Pan added, noting that the Fed is widely expected to revise towards average inflation targeting.
Elsewhere, two storms heading into the US Gulf Coast could put a pause in the country's oil activity at a time when US drillers have increased the number of rigs drilling for oil, analysts said.
"The market remains nervous as two hurricanes are bearing down on the Gulf of Mexico. More than half of output from the region has been closed ahead of the storms," ANZ analysts wrote in a report Aug. 24.
The Link LonkAugust 24, 2020 at 10:05AM
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/082420-crude-oil-futures-rangebound-as-investors-await-fresh-cues
Crude oil futures rangebound as investors await fresh cues - S&P Global
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