Crude oil futures were higher during mid-morning trade in Asia Tuesday amid an expected draw in last week's US crude inventory, while reassurance from Saudi Arabia on the ongoing supply cuts by OPEC and its allies further buoyed prices higher.
At 10:30 am in Singapore (0230 GMT), ICE Brent November futures moved 35 cents/b (0.56%) higher from Monday's settle at $62.94/b, while the NYMEX October light sweet crude futures contract was up 30 cents/b (0.52%) at $58.15/b.
According to analysts surveyed Monday by S&P Global Platts, US commercial crude inventories for the week ended September 6 fell 3.6 million barrels to 419.4 million barrels.
As for product inventory, analysts estimate US gasoline stocks to have fallen 1.4 million barrels, while distillate stocks had risen 220,000 barrels last week.
Preliminary data on last week's US crude and product inventory is due for release from the American Petroleum Institute later Tuesday and the more definitive numbers from the US Energy Information Administration data later Wednesday.
Meanwhile, bullish statements made by Saudi Arabia's new energy Minister Prince Abdulaziz bin Salman regarding the ongoing supply cut agreement by OPEC and its allies helped in crude price gains, analysts said.
"Crude oil gained as the new Saudi Arabian oil minister signaled output cuts will continue," ANZ analysts said in a note Tuesday.
Saudi Arabia will remain a "responsible producer," the kingdom's new energy minister said Monday, as he sought to reassure the market of continuity in the kingdom's oil policy.
However, he demurred on whether he would urge OPEC and its allies to pursue deeper oil output cuts to boost prices. Prince Abdulaziz is scheduled to co-chair a key monitoring committee meeting of the OPEC/non-OPEC coalition Thursday in Abu Dhabi, where ministers will discuss the bloc's 1.2 million b/d supply cut agreement that is scheduled to run through March 2020.
"The odds are that Prince Abdulaziz bin Salman will be working on Russia and other OPEC members to secure a big production cut to put a floor under oil once and for all. That may take some work as delegates are lowering expectations saying it is unlikely to recommend changes to the framework of the ongoing production cut agreement when it meets in Abu Dhabi," Price Futures Group's senior market analyst Phil Flynn said.
Demand concerns however, continue to keep price gains, analysts said.
The International Energy Agency on Monday lowered its global demand growth forecasts due to the ongoing trade tensions between the US and China. It now expects global growth to be only 1 million b/d, down 10% from its previous estimates.