Oil stable as Asian stock markets rebound, but trade concerns remain cautious



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SINGAPORE (Reuters) – Oil prices held steady on Monday, buoyed by a rebound in Asian equities, but analysts said the sentiment remained cautious after the financial markets tumbled last week, prompting fears of a slowdown. global growth.

Tanks of oil and gas are seen in an oil warehouse in a port of Zhuhai, China, October 22, 2018. REUTERS / Aly Song

The Brent crude futures contract at the beginning of the month, LCOc1, was $ 77.63 per barrel at 02:21 GMT, or 1 cent above their last closing price.

The West West Intermediate (WTI) US CLC1 futures price was $ 67.65 per barrel, up 6 cents from their latest settlement.

Despite the gains and calm of the financial markets on Monday morning, investors remained cautious after the heavy losses recorded last week.

Oil faced "bearish pressures from lower growth expectations around the world," said Alfonso Esparza, Senior Market Analyst at Oanda, a futures broker.

Hedge funds have reduced their upward bets on US crude over the last week to the lowest level in more than a year, the US Commodity Futures Trading Commission announced on Friday.

The speculation group reduced its combined futures and options position in New York and London by 42,644 contracts to 216,733 in the week to 23 October, its lowest level since September 2017.

Signs of slowing global trade have also been observed, with dry bulk and container shipments – which carry most raw materials and manufactured goods – under pressure.

On the supply side, oil markets remain tight as US sanctions against Iranian crude exports are expected to begin. They are expected to start next week and are expected to tighten, especially in Asia, which absorbs most of Iran's shipments.

The contraction in the Asian market is reflected in the small amount of unsold crude oil stored in oil tankers in the waters surrounding Singapore and southern Malaysia, the region's main oil trading and storage center.

According to the Refinitiv Eikon ship tracking data, four stationary super-tankers are currently filled with crude oil.

That's down from about 15 a year ago and 40 in mid-2016 at the height of the overabundance of supply.

In North America, however, there is no oil shortage as crude oil production in the United States, C-OUT-T-EIA, has increased by almost a third since mid-2016 to reach about 11 million barrels a day.

Production is expected to increase further. US drillers added two oil rigs during the week to October 26, bringing the total to 875, the highest level since March 2015, energy services firm Baker Hughes said Friday.

More than half of the US oil rigs are in the Permian Basin, western Texas, and eastern New Mexico, the largest oil shale formation in the country.

For a chart on the number of US platforms, click tmsnrt.rs/2OVjfgl.

Report by Henning Gloystein; Edited by Richard Pullin

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