Bunker prices to stay on mixed trend, expert says
The Bunker Review is contributed to IAA PortNews by Marine Bunker Exchange
Oil prices continue its volatility at highest level since 2008/2009. Oil prices rose in early trading on Thursday, clawing back a part of the 6 percent slump in the previous session on Wednesday after a shock jump in U.S. crude inventories and record Saudi output but sentiment remained bearish.
A 10.95 million barrel surge in U.S. crude stockpiles to 482.4 million, the biggest gain in 14 years, and Saudi oil production of 10.3 million barrels a day in March, and Russia produced 10.71 barrels a day also in March had battered crude futures on Wednesday. In U.S. the production is expected to stay on a 9.23 barrel a day level for 2015. The reason is slowing demand growth and soaring production, oil prices have dropped around 50 percent since June last year, when price began to fall, and the bottom has not been reached yet, if oil production continues as today.
Key oil producers in the Organization of the Petroleum Exporting Countries (OPEC) are pumping more than required, industry data show, and Iran may be about to increase sharply its oil output if it can agree final nuclear deal to end sanctions. Iran and Western powers are working towards a nuclear deal by June 30 which could end sanctions on Iranian oil exports.
Saudi Arabia sees crude price rising when they boosts production. Saudi oil increased production in March to the highest in at least 12 years and expects crude prices to rise in the future. - How??
OPEC will not cut production without cooperation from non-OPEC producers. Supply from Saudi Arabia, the biggest in OPEC, has added to a global glut that reduced oil prices by almost half since June. Russia is pumping oil at a rate close to the post-Soviet record, and the U.S. will produce the most crude since 1972 this year. – The challenge is to restore the supply and demand and reach price stability. This requires the cooperation of non-OPEC major producers, just as it did in the 1998-99 crises. OPEC is trying to force the non-OPEC countries to cooperate by simple continue the overproduction and oil prices will continue to fall to unacceptable levels for all parties concerned. OPEC kept output targets steady at its meeting in November, focusing on maintaining market share rather than supporting prices. The group’s next meeting is scheduled for June.
The bunker price volatility is expected to continue the next week.
* 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)
