Bunker prices to stay on mixed trend next week, expert says
The Bunker Review is contributed by Marine Bunker Exchange
Brent oil futures rose above $58 a barrel on Thursday as the dollar weakened and Iraqi security forces battled Islamic State fighters in Tikrit.
A weaker dollar on Thursday is pushing prices upward, but supply glut remains and will probably continue for some time but for how long is impossible to say, but if the same situation remains i.e., Saudi Arabia wants to protect their market share only and not showing any interest in protecting the oil price, the low price level will continue for long, but eventually the Saudi Arabia will probably act. There is still a significant oversupply and the market players are still more for a decline of oil prices than an increase.
But on Thursday the unrest in the Middle East is at the same time supporting higher prices. Iraqi security forces and mainly Shi'ite militia exchanged fire with Islamic State fighters in Tikrit on Thursday, a day after pushing into Saddam Hussein's home city in their biggest offensive yet against the militants.
Seven months ago the giant tanks in Cushing, Okla., the largest crude oil storage hub in North America, were three-quarters empty. After spending the last few years brimming with light, sweet crude unlocked by the shale drilling revolution, the tanks held just less than 18 million barrels by late July, down from a high of 52 million in early 2013. New pipelines to refineries along the Gulf Coast had drained Cushing of more than 30 million barrels in less than a year. - As quickly as it emptied out, Cushing has filled back up again. Since October, the amount of oil stored there has almost tripled, to more than 51 million barrels. As oil prices have crashed, from more than $100 a barrel last summer to below $50 now, big trading companies are storing their crude in hopes of selling it for higher prices down the road. With U.S. production continuing to expand, that’s led to the fastest increase in U.S. oil inventories on record. As of March 11, nationwide stocks were at 449 million barrels, by far the most ever.
Brent for April delivery was up 70 cents at $58.24 at 1050 GMT, after gaining $1.15 during the previous session in a rebound from a one-month low. West Texas Intermediate climbed 31 cents to $48.48 a barrel, after closing the previous session down 12 cents. The April contracts for Brent and WTI expire next week.
For the coming week again the market believes bunker prices will continue its volatility one day up and next day down.
* 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)
