Bunker market to start next week on mixed note, expert says
The Bunker Review is contributed by Marine Bunker Exchange
Brent crude oil futures slipped below $109 on Thursday on milder weather and lower demand for heating oil. A surge in dollar and concerns over the consumption outlook of the world’s second biggest oil consumer China have also put pressure on the oil price. But the oil market and Brent crude oil in particular is suffering from the prolonged crisis in Libya, where oil output has slumped as the government struggles to control militias and improve law and order in the country. Overall, Brent is being supported by continued geopolitical tensions in Libya, South Sudan and other places like Nigeria.
Brent faces strong support at $105.20 and resistance at $113 per barrel for the moment. It is difficult to say for how long. The WTI is expected to trade between $98 and $103.80, with price difference between the two of $6 –$8.
The US dollar held near two week highs against a basket of major currencies, while Asian shares struggled to find a solid footing as escalating tensions sent investors scurrying from risk assets. A strong dollar weighs on commodities such as oil, which are priced in the currency.
Investors are watching the unfolding crisis in Ukraine. Russian President Vladimir Putin ordered drills by his armed forces to test combat readiness in western Russia, near the border with Ukraine, prompting Washington to warn a military intervention would be a grave mistake.
Brent’s forward April contract dropped as much as 71 cents to $108.81 a barrel on Thursday on ICE Futures Europe Exchange. The spread between Brent and WTI narrowed to as little as $6.40 a barrel on Thursday, the smallest gap since October 9th.
WTI for April delivery dropped as much as 40 cents to $102.19 per barrel at NYMEX in New York.
Next week is expected to see oil prices go sideways while waiting for direction.
All prices stated in USD / MT
All time high Brent = $147.50 (July 11, 2008)
All time high Light crude (WTI) = $147.27 (July 11, 2008)