Oil Up Over Shrinking U.S. Crude Oil Supplies Despite Nagging Fuel Demand Worries

Oil was X on Thursday morning in Asia, holding onto earlier gains over a larger-than-expected draw in U.S. crude oil supply as well as news that Organization of the Petroleum Exporting Countries (OPEC) members were fully compliant with their pledged output curbs in September.

Brent oil futures edged up 0.16% to $43.39by 11:42 PM ET (3:42 AM GMT) and WTI futures edged up 0.17% to $41.11. Both Brent and WTI futures remained above the $40 mark, climbing for a third day despite resurging number of COVID-19 cases in Europe and the U.S. increasing fuel demand worries. France is the latest country to impose curfews as the

“The energy markets are certainly marching to their own drummer at the moment,” CMC Markets and Stockbroking chief market strategist Michael McCarthy told Reuters, adding that recent volatility may have attracted more trader positions.

On the supply side, the American Petroleum Institute (API) reported a 5.422 million-barrel draw in crude oil supply for the week ending Oct. 9 on Wednesday. The draw was much larger than the 2.3 million-barrel draw predicted in forecasts prepared by Investing.com, as well as the 951,000-barrel build reported during the previous week.

In the same report, API also reported draws in U.S. gasoline and distillate inventories that were nearly double investors’ expectations. Investors are looking to data from the U.S. Energy Administration (EIA), due later in the day. Both API and EIA data were delayed by a day due to Monday’s holiday in the U.S.

The black liquid was also boosted by OPEC+ teasing an alleged 102% compliance to agreed production curbs in September ahead of the body’s joint technical committee meeting later in the day. The joint ministerial monitoring committee is due to meet a few days later, on Oct. 18.

In Asia, an ANZ Research note pointed to a sharp increase in Chinese crude oil imports and purchases by Indian refiners in September ahead of big festivals in both countries lending support to the market.

“The outlook in Asia could be the reason OPEC+ alliance remains confident the market can withstand another 2 million barrels per day in the market,” the note added.