Bunker prices to edge down next week, expert says
The Bunker Review is contributed by Marine Bunker Exchange
The Brent and WTI crude oil have decreased about $3 the last week. Brent crude eased further under $105 on Thursday, to its lowest level since November, as oil dealers anticipated a rise in Libyan supply after the government neared a deal with rebels to reopen oil ports. Brent slipped further during the Thursday but has now in the afternoon bounced back to over $105 per barrel.
The gap between Brent and WTI is closely watched and is a heavily traded spread. The spread is now around $5.
Hopes were lifted for an end to an eight-month standoff that dried up oil exports and revenue in Libya as a government spokesman said an agreement with rebels to reopen key oil ports could be finalized in two three days. Well, this is not the first time news from Libya indicates the oil production will resume. Judging from the rebels demand the conditions are virtually impossible to accept for the Libyan government. The rebels are demanding a referendum on greater autonomy in the eastern provinces.
Libya’s crude output has fallen to around 150 000 bpd from 1.4 million bpd in July, when a wave of protests started across the North African country. In short term, demand for Libyan oil is likely to be limited due to reliability issues, while shipping and insurance costs are expected to rise in light of the recent hostilities.
Net U.S. imports of energy in 2013 were at their lowest level in more than 20 years because of domestic oil and gas production from North Dakota and Texas. Policymakers say it's time to capitalize on those reserves, but the sustainability of the energy boom may present long-term risk.
The Energy Information Administration said the rate at which overall energy imports declined last year was faster than the previous year. At the same time, the rate of export growth slowed while crude oil production increased by 15 percent, the same pace for 2012.
For the next week we expect oil price to edge downward.
All prices stated in USD / Mton
All time high Brent = $147.50 (July 11, 2008)
All time high Light crude (WTI) = $147.27 (July 11, 2008)
