Expert says bunker prices to start next week firm, at today's level
The Bunker Review is contributed by Marine Bunker Exchange
Crude oil prices edged up on Thursday as demand was estimated to have risen in the first half of the year, but a steeper rise was prevented by renewed signs of Asia’s economic slowdown.
World oil demand surged in the first six months this year against the same period in 2014, due to halving in crude oil prices and significant declines in the price of most fuels in many consuming countries, according to national estimates submitted to the Joint Oil Data Initiative (JODI).
Oil rose above $49 a barrel on Thursday as an emerging risk premium over the situation in Syria countered further sings of an economic slowdown in Asia and rising U.S. inventories.
Russia launched air strikes in Syria on Wednesday in its biggest Middle East intervention in decades. The attacks raised the spectra of Washington and Moscow running air strikes in the same region, but without coordination. “Russia’s military intervention in the Syrian conflict has increased the geopolitical risks, which is giving tailwind to the prices,” Carsten Fritsch, analysts at Commerzbank, said.
There was also some support to prices from Hurricane Joaquin, which was gaining strength as it moved toward the Bahamas.
Signs of economic slowdown in Asia and brimming U.S. oil stocks limited the rally Surveys on Thursday showed activity in China’s factories shrank and manufacturers’ confidence worsened in Japan.
In a reminder that a supply glut persists, U.S. crude inventories rose by 4 million barrels to 457.9 million in the week to Sept. 25, more than expected, a government report said on Wednesday.
Brent crude oil has almost halved in the past year because of excess supply and a 2014 shift in strategy by the Organization of the Petroleum Exporting Countries to defend market share against higher-cost supplies, rather than cut output to prop up prices.
There are signs that OPEC’s strategy to curb growth in higher-cost production such as U.S. shale by allowing prices to fall is starting to deliver, analysts say.
For the next week bunker prices are expected to remain stable around today’s levels.
* MGO LS
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)
