Crude oil futures mostly steady; sentiment still fragile amid recession fears

Crude oil futures were mostly steady in mid-morning trade in Asia June 24 after shedding early morning gains as sentiment remained fragile following steep declines in the last two sessions.

At 10:30 am Singapore time (0230 GMT), the ICE August Brent futures contract was down 10 cents/b (0.09%) from the previous close at $109.95/b, while the NYMEX August light sweet crude contract rose 12 cents/b (0.12%) at $104.39/b.

Both crude oil markers were on track to post their second weekly decline, having lost around 10% in value over the last two weeks as recession fears sparked several rounds of steep daily falls.

While analysts are not ruling out further declines, some noted that crude oil prices should nonetheless remain supported above $100/b as oil market fundamentals remain supportive despite larger macroeconomic weakness.

"The oil market remains very tight and declining production should prevent prices from falling below the $100/b level," OANDA's senior market analyst Edward Moya said in a June 24 note.

In a sign of persistent market tightness, the backwardation in the prompt M1-M2 ICE Brent intermonth spread jumped 50 cents/b on the day to settle at $3.59/b in the June 23 session despite the daily price decline. Week-on-week, the M1-M2 spread widened 78 cents/b, while front-month August ICE Brent crude contract was down $9.76/b over the same period.

"The prompt ICE Brent time spread has actually strengthened as the flat price has weakened," ING analyst Warren Patterson said. "This suggests that there is tightness in the market right now and we would expect this to only grow as we lose more Russian supply."

In the US, the Energy Information Administration said it is delaying the bulk of its scheduled data releases for the week starting June 20 due to an unnamed systems issue, according to a June 22 statement.

Among the releases was the weekly data on US crude oil and refined product inventories -- highly-watched by investors for the latest gauge of the US' supply-demand fundamentals.

The Weekly Natural Gas Storage Report will be released as scheduled June 23, the EIA said, but all other reports will be delayed. The EIA did not specify the extent of these delays.

Dubai crude swaps were lower in mid-morning trade in Asia June 24 from the previous close, though the intermonth spread was higher.

The August Dubai swap was pegged at $98.14/b at 10 am Singapore time (0200 GMT), down 48 cents/b (0.49%) from the June 23 Asian market close.

The July-August Dubai swap intermonth spread was pegged at $3.56/b at 10 am, up 9 cents/b over the same period, and the August-September intermonth spread was pegged at $2.65/b, up 6 cents/b.

The August Brent-Dubai EFS was pegged at $11.65/b, up 76 cents/b.