MABUX: Bunker Market this morning, Oct 12
The Bunker Review was contributed by Marine Bunker Exchange (MABUX)
Oil Market close, Friday evening
Oil prices slip over 1% after Oil worker strikes end.
Oil prices slipped more than 1% on Friday after an oil worker strike in Norway ended, which should boost crude output even as Hurricane Delta forced U.S. energy firms to cut production.
Brent futures fell 49 cents, or 1.1%, to settle at $42.85 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 59 cents, or 1.4%, to settle at $40.60.
Despite Friday’s price slide, both benchmarks gained about 9% last week, their first increase in three weeks and the biggest weekly rise for Brent since June.
Oil futures climbed earlier in the week due to concerns the strike in Norway and the hurricane headed for the U.S. Gulf Coast would cut crude output.
Norwegian oil firms struck a wage bargain with labour union officials on Friday, ending a 10-day strike that had threatened to cut the country’s oil and gas output by close to 25% next week.
“One of the bullish factors that had been supporting prices fell apart late in the day when it was announced that Norway would end their strike,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Also weighing on prices were doubts voiced by Republicans in the U.S. Senate that a coronavirus economic stimulus deal could be reached before the Nov. 3 election.
Earlier in the day, oil prices briefly turned positive after U.S. House Speaker Nancy Pelosi said she would resume talks on a possible $1.8 trillion COVID-19 stimulus package with Treasury Secretary Steven Mnuchin.
Hurricane Delta, meanwhile, dealt the greatest blow to U.S. offshore Gulf of Mexico energy production in 15 years, halting most of the region’s oil and nearly two-thirds of natural gas output.
Looking ahead, JP Morgan said that a worsening global oil demand outlook due to a potential rise in coronavirus cases this winter would likely prompt the Organization of the Petroleum Exporting Countries (OPEC) to reverse a planned easing of oil cuts in 2021, with Saudi Arabia offering deeper cuts below its current quota.
Oil Market today, Monday morning
Oil prices extend slide as U.S. producers restore output post-hurricane.
Oil prices dropped for a second straight session on Monday as U.S. producers began restoring output after Hurricane Delta weakened, while a strike that had affected production in Norway came to an end.
Brent crude for December fell 32 cents, or 0.8%, to $42.53 a barrel by 0347 GMT and U.S. West Texas Intermediate for November was at $40.30 a barrel, down 30 cents, or 0.7%.
“We had good support for both Brent and West Texas on the back of some supply concerns,” Michael McCarthy, chief market strategist at CMC Markets in Sydney said, adding that last week’s big draw in middle distillates and petrol inventories pointed to a better-than-expected demand picture.
In the United States, Hurricane Delta, which dealt the greatest blow to U.S. offshore Gulf of Mexico energy production in 15 years, was downgraded to a post-tropical cyclone by Sunday.
Workers headed back to production platforms on Sunday while Total SA continued restarting its 225,500 barrel-per-day Port Arthur, Texas, refinery on Sunday.
However, Colonial Pipeline, the largest oil products pipeline in the United States, shut its main distillate fuel line after the hurricane disrupted power, the company said on Sunday.
Despite the storm’s impact on offshore operations, oil prices holding around $40 a barrel over the past few months encouraged U.S. energy firms to add oil and natural gas rigs for a fourth week in a row last week, data from Baker Hughes showed.
Elsewhere, production in Libya, one of the members of the Organization of the Petroleum Exporting Countries, is expected to rise to 355,000 barrels per day on Monday after force majeure was lifted on the Sharara field from Sunday.
Oil Future close 9th October, 2020
Brent crude: $ 42.85 (-0.49) /brl FM delivery Dec (FM=Front Month)
Light crude (WTI): $ 40.60 (-0.59) /brl FM delivery Nov
Gasoil ARA; $ 347.00 (+3.50) /mton FM delivery Oct
NY Harbor Ulsd: $ 367.37 (+0.31) /mton FM delivery Nov
Oil Futures trading at GMT 05.12; Brent: $-0.42, WTI: $-0.44.
Expect Fuel Oil prices today will drop slightly a couple of usd.
( Fuel Oil, it means 380 HS plus VLSFO together ).
MGO and NY Harbor Ulsd more or less unchanged. All prices based
on Oil Future close Friday evening.
Expect a quiet trading day with bunker prices little change.