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NYMEX crude higher on rebound from overnight, API estimates ahead

Published 11/02/2015, 07:23 PM
Updated 11/02/2015, 07:25 PM
© Reuters.  NYMEX crude gains on rebound
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Investing.com - Crude oil gained in Asia on a rebound from overnight declines as investors await an industry report on U.S. stockpiles.

On the New York Mercantile Exchange, WTI crude rose 0.29% to $46.27 a barrel.

Ahead, the American Petroleum Institute will report its estimates of crude and refined product stocks at the end of last week, followed a day later by more closely-watched figures by the U.S. Department of Energy.

Overnight, crude futures fell considerably on Monday, as record-high production in Russia last month and mixed economic data in China exacerbated worries on the impact of a long-term supply glut on global energy markets.

On the Intercontinental Exchange (ICE), brent crude wavered between $48.62 and $49.69, before closing at $48.79, down 0.80 or 1.60% on the day. Brent futures have closed in the red in three of the last four sessions and seven of the last nine.

Nevertheless, North Brent Sea futures are up by approximately 3% over the last 30 days of trading. Meanwhile, the spread between the international and U.S. domestic of crude oil stood at $2.67, below Friday's level of $2.97 at the close of trading.

On Monday, Russia reported that production last month hit a post-Soviet record of 10.78 million barrels per day, slightly above its daily September level of 10.74 million bpd. Over the last several months, Russia has stubbornly refused to cut output in an effort to defend its market share. When Russia met with a host of OPEC members last month in Vienna, the major oil producers reportedly did not discuss any strategies for reducing production in order to help boost crashing prices.

"For Russia, given the structure of production, it's very difficult to cut supply artificially," Russia deputy minister Arkady Dvorkovich told CNBC in September. "If oil prices will be low enough for a long period of time, supply will go down in a natural way, and I think it is the most efficient stabilizer for the market."

Last month, Novatak, the largest private crude oil producer in Russia reported a 40% increase in production on a year-over-year basis. At the same time, Rosneft, one of the largest energy companies in Russia in terms of overall production, reported a 1.1% decline in October over the last 12 months.

Separately, Chinese research firm Markit said Monday that its Caixin manufacturing purchasing managers index increased to 48.9 in October, marking the eighth consecutive month of contraction in nationwide factory activity. Any reading below 50 provides a strong indication of contraction in the manufacturing sector. China is the world's second-largest consumer of oil behind the U.S.

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