Next week oil prices may edge up as tensions ease, expert says
The Bunker Review is contributed by Marine Bunker Exchange
Brent crude oil is rising on Thursday towards $108 a barrel, supported by worries about potential supply disruption due to the possibility of Western sanctions on Russia’s energy sector. Data from the US showing growth of the economy also fed into stronger prices.
The United States and the European Union agreed on Wednesday to work together on preparing possible further economic sanctions in response to Russia’s actions in Ukraine and to make Europe less dependent on Russian gas. The US President Barack Obama warned at a news conference that “the isolation will deepen, sanctions will increase” for Russia, the world’s biggest oil producer, if Moscow continues its current course. The uncertainty on Russia is creating a risk premium on oil prices around $5 plus minus a couple of dollars.
WTI crude oil for May delivery was up 85 cents at $101.13 a barrel, following a $1.07 rise in the previous session, the highest close in three weeks. The contract was supported by 1.33 million barrel fall in oil stocks at the Cushing, Oklahoma storage hub, the delivery point for US crude futures.
In January TransCanda’s pipeline began delivering 700.000 barrel of oil per day to the the US Gulf Coast causing a drop in stocks in Cushing. But a surge in crude stocks in the US Gulf Coast to a record high suggested that the largest US refinery hub was not able to use all the supply from Cushing.
Irans’ oil exports have stayed above levels allowed under Western sanctions for a fifth month, according to sources who track tanker movements.
Supporting prices, supply was low from Libya and Nigeria. Oil theft is likely to push Nigeria off its spot as top African crude oil exporter in May, when exports could fall to their lowest since records began in 2009.
For next week we expect oil price to be stable or with a tendency to edge upward since the geopolitical situation is ebbing out and we are soon back to normality.
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)
