MABUX: Bunker Market this morning, April 12
The Bunker Review was contributed by Marine Bunker Exchange
Oil prices sliped on Thursday as OPEC mulls output hike, U.S. stocks build
Oil prices fell on Thursday after sources said OPEC may raise output from July if Venezuelan and Iranian supplies fall further and prices keep rallying.
Rising U.S. crude stockpiles also dragged U.S. futures down by more than $1 a barrel. West Texas Intermediate (WTI) crude fell $1.03 to settle at $63.58 a barrel.
Global benchmark Brent settled at $70.83 a barrel, down 90 cents.
'Now there is a suggestion that OPEC may surprise us and raise production pre-emptively if we get a price spike,' said Phil Flynn, an analyst at Price Futures Group in Chicago.
The Organization of the Petroleum Exporting Countries may raise oil output from July if Venezuelan and Iranian supply drops further and prices keep rallying, because extending production cuts with Russia and other allies could overtighten the market, sources familiar with the matter said.
Venezuelan crude production has dropped below 1 million barrels per day (bpd) due to U.S. sanctions, the International Energy Agency said on Thursday, even below the 960,000 bpd OPEC reported on Wednesday.
Iranian supply could fall further after May if, as many expect, Washington tightens its sanctions against Tehran.
OPEC and its allies led by Russia are due to meet in Vienna on June 25-26 to set their policy.
Bunker Market Friday morning
Oil prices firm amid OPEC supply cuts, U.S. sanctions on Iran and Venezuela
Oil prices were firm on Friday, supported by ongoing supply cuts led by producer club OPEC and by U.S. sanctions on petroleum exporters Iran and Venezuela.
'We see Brent and WTI prices averaging $75 per barrel and $67 per barrel respectively through the rest of this year, but risk is asymmetrically skewed to the upside,' RBC Capital Markets said in a note.
'Geopolitically infused rallies could shoot prices toward or even past the $80 per barrel mark for intermittent periods this summer,' the Canadian bank said.
Oil markets have been pushed up by more than a third this year by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), U.S. sanctions on oil exporters Iran and Venezuela, and escalating fighting in Libya.
Production in Venezuela has been plunging as the U.S. sanctions add to a deep economic and political crisis, while the U.S. government is expected to tighten oil sanctions against Iran in May.
'Electrical outages added a further hurdle to Venezuelan production, which fell by 290,000 barrels per day in March to 732,000 barrels per day. Iranian production was stable at 2.7 million barrels per day, (but) could take a further hit if the U.S. cuts import waivers in May,' said Jefferies bank on Friday.
Oil Future close 11th April:
MGO: $627(unchanged)/mton (April contact expired y'day. New Front Month May)
NY Harbor Ulsd: $636.41(-6.28)/MTON
Oil Futures trading at GMT: 05.08; Brent:+23 cents, WTI:+27 cents
The general tendency is irregular. The market has not decided yet which way to go.
After y'days drop a slight rebound is in the cards.
Expect bunker prices to drop. - Fuel Oil down 5-6 USD/MTON, NY Harbour also down
6 USD/MTON for the Americas and MGO for the rest of the world unchanged.
Note: The above predictions are based on Oil Future close last night 11th April.