Crude oil futures were steady to slightly lower in mid-morning trade in Asia Tuesday amid expectations of a build in US product stocks data due for release in coming days.
"Crude oil prices started New Year's Eve on a dull note, with the year-end trading day finding caution in the market despite the positive news we have seen, including the expectation of the [US-China] phase one trade deal signing," IG market strategist Pan Jingyi said.
"Prices nevertheless held above $66.50/b when last checked, with support broadly expected going into January. This is as the market looks to the recovery of business confidence following the positive developments in US-China trade that could further stimulate demand," Pan added.
US gasoline stocks were expected to have risen 3.7 million barrels in the week ended December 27, according to a survey of analysts by S&P Global Platts Monday, which, if confirmed, would mark the eighth straight week of build and put gasoline inventories around 4.8% above the five-year average of Energy Information Administration data.
Distillate stocks were forecast by the surveyed analysts to have risen 3.2 million barrels to 128.1 million barrels in the week, which, if confirmed, would widen the deficit to the five-year average to 9.6%, Platts reported earlier.
That said, US commercial crude inventories were expected to have fallen 3.1 million barrels to 438.3 million barrels in the week to December 27, according to the survey. The drawdown, if confirmed, would mark a third consecutive week of decline and put stocks roughly 10 million barrels below early-December highs.
The American Petroleum Institute's weekly US stocks report is due for release later Tuesday and the more definitive Energy Information Administration's report on Friday.
Meanwhile, rising crude exports from Libya were also weighing on sentiment, industry sources said.
Libyan crude exports were expected to rise 22,580 b/d month on month to 1.092 million b/d in January, a shipping source told Platts Monday.
The rise was attributed to increased loadings of El Sharara, with 6.27 million barrels expected to load from Zawiya terminal next month, up 9,677 b/d from December, Platts reported.
"Oil prices have followed the general de-risking drift into year end despite a rise in Middle East tensions and last week's bullish oil price and inventory draws as the broader markets appear to be losing some of that holiday cheer," AxiTrader chief Asia market strategist Stephen Innes said in a note Tuesday. "I think the same holds for the oil markets given the speculative length into year end," he added.
- Platts-