Bunker prices likely to remain volatile, but may end next week lower
The Bunker Review is contributed by Marine Bunker Exchange
Brent crude oil slipped below $54 a barrel on bigger than expected oil stocks in the U.S. though losses were limited on a weaker dollar as the Federal reserve signaled a slower pace of interest rate hike.
On Thursday Brent crude oil futures for May fell $1.32 to $54.59 a barrel and U.S. WTI crude oil futures for April shrunk $1.76 to $42.90 a barrel by 12.50 GMT after jumping as much as six percent in the previous session.
The harsh reality of huge inventories and oversupply of crude oil is continuing to push oil prices further down. It want be long until the WTI will pass $40 a barrel meanwhile the Brent will follow with a spread between the two of plus $7 -10 a barrel.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2.865 million barrels to 54.4 million barrels, a record since the EIA began tracking inventories.
Adding to the oversupply of oil, China the world’s second largest oil consumer could trim oil purchases as its petroleum reserves reach capacity and oil refiners cut production. Still, some support for crude oil prices could be seen from India which is set to import 8 million barrels of Iraqi oil to fill its first strategic petroleum reserve, taking advantage of cheap prices.
OPEC, which supplies about 40 percent of the world’s crude, pumped 30.6 million barrels a day in February, exceeding its target of 30 million barrels for a ninth consecutive month.
Non-OPEC supply grown by 6 million barrels a day since 2008, while productions by members of the Organization of Petroleum Exporting Countries have remained at about 30 million barrels.
Algeria’s oil minister met with his Angolan counterpart and Nigeria’s ambassador to Algiers to discuss an initiative by Algerian President Abdelaziz Bouteflika to increase dialogue between oil exporters, members and non-members of OPEC, and to restore balance to the oil market. – It is obvious that the low oil prices are starting bite, and will continue as long as today’s production level persists.
For the coming week again the forecast is that bunker prices will continue its volatility – one day up and next day down, but probably more down than up.
* 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)
