Brent futures fell 33 cents, or 0.7%, to $45.13 a barrel by 4:18 am GMT, while West Texas Intermediate futures were down 21 cents, or 0.5%, at $42.68 a barrel.
The continued spread of COVID-19 worldwide remains the key drag on the short-term demand outlook. Global COVID-19 infections exceeded 22 million case counts while total deaths reached 779,443, according to data from John Hopkins University. Resurgences of infections in major European economies also reignited concerns that global economic recovery will continue to slow as countries tightened pandemic containment restrictions. Prices were dragged down also by US economic stimulus still nowhere in sight and U.S.-Sino trade talks being postponed.
On the other hand, losses were limited by the positive API inventory report. US commercial crude inventories were reported to have declined by 4.26 million barrels for the week ending August 14, slightly higher than the 3.8 million barrels drawdown analysts estimated on August 17. Furthermore, it will be the fourth consecutive week of drawdown for US commercial crude inventories if the official weekly US inventory report due for release by the Energy Information Administration later today confirms the API industry report.
API also reported a big build in gasoline inventories, which has somewhat taken the edge off the bullish market sentiment due to concerns about further potential covid-19 related gasoline demand disruptions in the northern hemisphere winter, said Stephen Innes, chief global market strategist at AxiCorp.
On the supply side, members of the OPEC+ alliance will be meeting to discuss about compliance and compensation cuts through September for members who failed to abide by their output quotas from May to July in the Joint Ministerial Monitoring Committee meeting.
Compliance with the cuts stood at 95-97% in July, according to OPEC+ sources and a draft report reviewed by Reuters. Russian Energy Minister Alexander Novak is set to join the video meeting despite having tested positive for the novel coronavirus. According to ING analysts, despite uncertainty over the demand outlook, along with weaker Brent time spreads, physical values and continued weakness in refinery margins, it is largely expected that OPEC+ will continue with the deal in its current form, and retain cuts of 7.7m b/d for now.
MARKETS NEWS:
* Libya’s Oil Ports Allowed to Reopen to Tackle Power Crisis
* Trump Administration Weighs Tighter Sanctions on Venezuelan Oil
* U.S. Strategic Reserve Crude Oil Stocks Declined 6.4M Bbl
* API Report U.S. Crude Stockpiles Fell 4.26M Bbl Last Week
* Rosneft Prepares for Life After OPEC+ Cuts With Arctic Drilling
* Adnoc CEO Sees ‘Robust Return’ of Oil Demand, Mainly From China
* U.S. HLS Crude Declines to Lowest Since June as Demand Ebbs
* Benchmark VLCC Rates Drop; Mideast-Japan Clean Tankers Advance
OTHER NEWS:
* Trump Cancels China Talks, Raising Questions About Trade Deal
* Chevron Reducing Energy Use, Boosting Power Output in California
* E*Trade Hit With Lawsuit After Investors Burned by Subzero Oil
* Nigeria’s Long-Planned Oil Reform Bill to Go to President: Rtrs
* Koch’s Lead Crude Oil Trader Ricardo Lopez Leaves Firm
* Total Halts Danish Oil Platform Production on Greenpeace Protest
OIL PRODUCT NEWS:
* U.S.: Exxon May Idle FCC; Fire at Chevron Pasadena
* EUROPE: Shell Wesseling Work; Gasoil Net Longs Drop
* ASIA: China Buying U.S. Crude; Cnooc Sells Gasoline
ECONOMIC EVENTS: (Times are London. )
* 3:30pm EIA weekly oil inventory report
* OPEC+ Joint Ministerial Monitoring Committee meeting
ANALYST COLUMNS:
* Oil Likely a Bit Ahead of Itself, Complex Still Not Out of Woods
* South America Emerges as Low-Cost Offshore Oil Producer: Rystad
OTHER FINANCIAL MARKETS:
* Dollar Steadies; Storm Delays Hong Kong Trading: Markets Wrap
Singapore 380 INDIC
Sep20 266.50 / 268.50
Oct20 263.75 / 265.75
Nov20 262.00 / 264.00
Dec20 262.25 / 264.25
Jan21 264.25 / 266.25
Feb21 266.25 / 268.25
Q4-20 262.75 / 264.75
Q1-21 266.25 / 268.25
Q2-21 271.25 / 273.25
Q3-21 275.00 / 278.00
CAL21 269.50 / 275.50
Rotterdam 3.5% INDIC
Sep20 250.25 / 252.25
Oct20 247.50 / 249.50
Nov20 246.25 / 248.25
Dec20 246.50 / 248.50
Jan21 248.25 / 250.25
Feb21 250.00 / 252.00
Q4-20 246.75 / 248.75
Q1-21 250.00 / 252.00
Q2-21 254.00 / 256.00
Q3-21 256.75 / 259.75
CAL21 253.00 / 259.00
Singapore VLSFO 0.5% INDIC
Sep20 334.00 / 339.00
Oct20 336.25 / 341.25
Nov20 338.50 / 343.50
Dec20 340.75 / 345.75
Jan21 343.75 / 348.75
Feb21 346.25 / 351.25
Q4-20 338.50 / 343.50
Q1-21 346.25 / 351.25
Q2-21 353.75 / 359.75
Q3-21 361.00 / 367.00
CAL21 356.75 / 362.75
Rott VLSFO 0.5% INDIC
Sep20 312.25 / 317.25
Oct20 315.50 / 320.50
Nov20 318.00 / 323.00
Dec20 320.25 / 325.25
Jan21 323.75 / 328.75
Feb21 326.75 / 331.75
Q4-20 318.00 / 323.00
Q1-21 326.75 / 331.75
Q2-21 334.25 / 340.25
Q3-21 341.00 / 347.00
CAL21 336.75 / 342.75
Sing 10ppm GO INDIC
Sep20 50.29 / 50.43
Oct20 50.72 / 50.92
Nov20 51.17 / 51.37
Dec20 51.63 / 51.83
Jan21 52.15 / 52.35
Feb21 52.66 / 52.86
Q4-20 51.20 / 51.40
Q1-21 52.66 / 52.86
Q2-21 54.05 / 54.25
Q3-21 55.30 / 55.50
CAL21 54.41 / 54.81
ICE Gasoil 10ppm INDIC
Sep20 381.47 / 383.47
Oct20 386.24 / 388.24
Nov20 390.05 / 392.05
Dec20 394.00 / 396.00
Jan21 398.19 / 400.19
Feb21 402.27 / 404.27
Q4-20 390.10 / 392.10
Q1-21 401.99 / 403.99
Q2-21 410.49 / 412.49
Q3-21 421.72 / 423.72
CAL21 415.39 / 417.39
Rott Hi5 Sing Hi5
Sep20 63.34 69.09
Oct20 69.34 73.84
Nov20 73.09 77.59
Dec20 75.34 79.59
Jan21 77.34 80.59
Feb21 78.84 81.09
Q4-20 72.60 77.05
Q1-21 78.84 81.18
Q2-21 85.51 85.34
Q3-21 88.43 87.84
CAL21 84.00 86.00