Singapore: Oil markets edged up in early Asian trading
on Monday, with U.S. crude contracts receiving support from reduced
American drilling, although weakening demand weighed on international
markets.
U.S. crude futures were trading at $44.86 per barrel at 0215 GMT, up 23
cents from their last settlement, pushed by a slight fall in drilling
activity.
The global crude benchmark Brent was trading at $48.18 a barrel, up 4 cents from its last close.
"Baker Hughes reported U.S. oil rig count fell 10 to 652 last week. The
consecutive second decline suggests a low price environment coupled with
low oil price hedge is starting to impact U.S. supply," ANZ bank said
on Monday.
The International Energy Agency (IEA) said on Friday that a cut in
production from non-OPEC suppliers, especially from the United States,
would lead to a rebalancing of the market by next year.
The outlook for oil markets outside the United States remained weak,
however, as high production clashed with stalling demand, creating a
market in which more oil is produced than needed.
"Both the supply and demand pictures look less favorable over the coming
months... Outside the U.S., oil fundamentals appear to be slipping
seasonally," Morgan Stanley said on Monday in a note to clients, adding
that there was potential for some floating storage within the second
half of 2015.
ANZ said strong supply from the Middle East remained a concern on the
supply side, while Macquarie bank noted that falling auto sales in
August were acting as a drag on demand.
"Sales were 1.0 percent lower YoY (year-on-year), slightly more than the
0.8 percent fall seen in July 2015," the bank said, although it added
that sales could pick up towards the end of the year.
In part due to oversupply and to defend market share, Middle East
supplier Kuwait set its October Official Selling Price (OSP) for crude
oil to Asia 60 cents lower compared with September at a discount of
$1.95 per barrel versus Oman/Dubai prices.
