MABUX: Bunker prices to remain stable throughout the week, with slight variations
The Bunker Review is contributed by Marine Bunker Exchange
West Texas Intermediate traded near the lowest price in 17 months and London’s Brent was at the weakest since June 2012, after crude stockpiles surged more than forecasted in the U.S., still the world’s largest oil consumer.
The U.S. crude inventory report from Wednesday showed expansion by 5 million barrels last week, the Energy Information Administration reported yesterday, exceeding 2 million barrels from market’s expectation. Brent is down more than 20 percent from its recent peak, meeting a common definition of a bear market, as global supplies rise amid signs of slowing demand. Market believes that investors may sell WTI contracts if prices climb to about $90 a barrel, and the rock bottom for WTI is around $85 a barrel.
WTI for November delivery was at $87.51 a barrel in electronic trading on the New York Mercantile Exchange (NYMEX), up 20 cents, at 3:20 p.m. Singapore time. The contract slid $1.54 to $87.31 yesterday, the lowest close since April 2013. The volume of futures traded was 34 percent above the 100-day average.
Brent for November settlement was 6 cents higher at $91.44 barrel on the London-based ICE (Intercontinental Exchange). Brent crude futures held steady above $91 a barrel on Thursday, after rebounding from a 27-month low hit in the previous session, but market has once again turned around and Brent traded on Thursday afternoon around $90.50 a barrel. The European benchmark crude traded at a premium of $3.87 to WTI. The spread closed at $4.07 yesterday, the widest in two weeks.
WTI has declined 11 percent this year amid accelerating output from producers including the U.S. and Russia. The Organization of Petroleum Exporting Countries (OPEC), which supplies about 40 percent of the world’s crude, pumped 30.935 million barrels a day in September. That’s the highest level in 13 months.
U.S. production increased to 8.88 million barrels a day in the week ended October 3, the most since March 1986, according to the EIA, the Energy Department. The crude inventories expanded to 361.7 million, compared with five year average of 355 million.
We expect bunker prices to stabilize around this level for a while, with minor variations for the coming week.
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)
