Oil prices were relatively steady with Brent crude holding above $63 per barrel near an eight-week high and WTI finishing above $57 per barrel.
The physical spot market is getting tighter and strong demand for Arabian Gulf medium sour crude has reflected that trend.
So as yet, there are no signs of any weaker oil demand as had been anticipated.
Both OPEC and the International Energy Agency (IEA) have pointed to a swelling oil glut next year due to booming non-OPEC supplies, especially in the US.
The physical market tells a different story. The scenarios envisaged by both OPEC and the IEA are based around unrealistic outlooks that focus on lower projected oil demand as a likely consequence of the ongoing trade war between the US and China. As a result, the pair have warned about a looming supply glut which could emerge in 2020.
But again, the real physical market tightness suggests otherwise.
US crude inventories rose by 1.8 million barrels despite refinery runs increasing by 519,000 bpd. However, US crude in storage at the Cushing, Oklahoma, delivery hub for WTI fell 2.3 million barrels, which represents the biggest drawdown in three months, as reported by the IEA.
The US oil and gas rig count continued to fall in what was the 13th drop for the past 14 weeks.
According to Baker Hughes, the US oil rig count is down three from last week to 671, with gas rigs unchanged at 129. US shale oil rigs also continued to drop.
The overall positive demand picture has encouraged money managers to continue to increase their net-long positions in Brent crude oil futures for the 4th consecutive week in a row. That followed nine months of decline.
Brent crude oil futures and options money managers increased their net-long positions by by 543 contracts to 311,304 in the week ending Nov. 19.
However, they cut net long positions in WTI crude oil futures and options by 19,593 contracts to 133,581, over the same period.
