Market specialist says bunker prices to edge down next week
The Bunker Review is contributed by Marine Bunker Exchange
The European Central Bank cut interest rates to record lows on Thursday, imposing negative rates on its overnight depositors to cajole banks into lending more and to fight off the risk of Japan-like deflation. The cut, the first time the ECB has deployed a negative deposit rate which effectively charges banks to deposit overnight, was a response to a slowdown in inflation far below the ECB's target and to weak euro zone lending.
Brent Crude oil fell to a three week low below $108 a barrel on Thursday as worries about risks to supply caused by violence in Ukraine eased on hopes that talks could resolve the situation. Ample supply in the U.S. also helped to drag down prices, with Brent crude on its longest losing streak since the start of the year.
Geopolitical tensions pushed up Brent to above $111 a barrel last month, but prices have rebounded about 3 percent since then.
Ukraine’s President-elect Petro Poroshenko , said he may discuss a plan to end violence in eastern Ukraine with Russian leader Vladimir Putin. President Putin will hold face to face meetings with German Chancellor Angela Merkel, French President Francois Hollande and British Prime Minister David Cameron at a D-Day anniversary gathering in France later this week. – There are many possibilities for talks this weekend which makes the market less concerned as it was when the Crimea crisis erupted.
The International Monetary Fund (IMF) cut its 2015 economic growth forecast for China to about 7 percent, but urged authorities to avoid further stimulus measures and concentrate on curtailing financial risks instead.
The United States is unlikely to repeat the sharp seasonal decline in crude stocks seen in June-July last year, due to strong domestic production.
Optimism that a July deadline to negotiate a long-term deal for Tehran to curb its nuclear program in return for an end to economic sanctions will be extended, keeping the door open to an increase in Iranian supply also put pressure on prices.
The U.S. inventories shrank by 3.43 million barrels to 389.5 million last week, the Energy Information Administration reported yesterday. There is still concern that the market is oversupplied by crude oil, which will put pressure on oil prices downward.
For the coming week we expect oil prices 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)
