Crude Oil Narrowly Mixed In Asia With API Estimates Ahead
Crude oil prices were narrowly mixed in Asia on Tuesday with industry estimates of US inventories to set the near-term tone.
On the New York Mercantile Exchange crude futures for January delivery rose 0.14% to $57.30 a barrel, while on London's Intercontinental Exchange, Brent dipped 0.05% to $63.41 a barrel.
Later on Tuesday, the American Petroleum Institute (API) releases its estimates of weekly crude and refined product stocks. Initial estimates see a 3.518 million barrels drop in crude, a 1.327 million barrels decline in distillates and a 2.231 million barrels build in gasoline.
The estimates from API are followed by official data from the Energy Information Administration on Wednesday
Overnight, crude oil prices settled lower on Monday as rising US output offset support from the Forties pipeline shutdown, while a Nigerian oil union strike raised the prospect of supply disruptions.
Oil prices struggle to hold gains amid further clarity on the Forties pipeline shutdown as Bloomberg reported, citing an email from Ineos Group, that the hairline crack which caused the pipeline outage “has not propagated”.
The pipeline outage, however, is expected to continue to support Brent prices as “there is no reliable information” concerning the length of time the pipeline will be out of operation, Commerzbank (DE:CBKG) said.
Losses in oil prices were capped somewhat amid the growing prospect of supply disruptions as Nigeria's Pengassan oil union launched a strike on Monday. The strike comes after talks with the government over unfair labor practices ended in deadlock.
Supply disruptions are expected to be tailwind for oil markets as Nigerian oil exports could come under pressure.
The poor start to the week for crude prices comes as data last week showed traders remained bullish on both crude and Brent oil.
Hedge funds increased net-longs in Brent crude oil to a fresh record of 544,000 lots in week ending Dec. 12, according to the Commodities Futures Trading Commission Commitment of Traders report. Combined net-long crude oil positions fell to 956,000 contracts, about 8,000 lots below the record.