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2013 May 23   15:51

Expert predicts downward trend in bunker prices on weak macroeconomic data

The Bunker Review is contributed by Marine Bunker Exchange

In the beginning of the week oil indexes climbed on hopes for rising demand as the peak summer gasoline demand season in U.S. approaches.  Prices were also supported by weakness in the dollar after disappointing U.S. economic data, including a bigger-than-expected rise in new claims for jobless benefits and a sharp drop in housing construction. However four straight sessions of gains was set to end on May 21.

A government report on May 22 showed U.S. gasoline supplies unexpectedly gained and crude stockpiles declined less than expected (crude supplies slipped 338,000 barrels to 394.6 million, less than half as much as projected). Energy Information Administration said gasoline inventories rose by 3 million barrels last week, suggesting the U.S. domestic fuel market was well supplied for the peak driving season and sparking worries that summer demand might be weaker than expected.

The oil prices are also under pressure by strong dollar: the Dollar Index rose recently  to a 34-month high after Federal Reserve Chairman Ben S. Bernanke said in testimony to Congress that the central bank may reduce monthly bond purchases (quantitative easing (QE)), at its next few meetings if it’s confident of sustained gains in the economy. The U.S. central bank's three QE programs have released significant funds into money markets over the last four years, boosting many commodities including oil. Any sign that the easing could end shall be bearish for many assets.

Europe’s recession and China’s economic slowdown are also hurting world oil market. The euro-area economy declined 0.2 percent in the three months ended March, extending the region’s recession to a record sixth quarter. Brent crude fell about 6 percent this year thereafter on concern Europe’s fuel demand will drop.

Chinese refineries that use the fuel to make more valuable gasoline and diesel are cutting purchases as growth slowed to 7.7 percent in the first quarter, down from 7.9 percent in the previous three months. That drove stockpiles in China to the highest in almost a year in February and March.

At the same time uncertainty over political tensions in the Middle East is still the factor supporting the oil prices. While Russia's foreign minister said Iran must take part in a proposed international conference to try to end Syria's civil war, U.S. and Turkey presented a joint front against Syria during the Turkish leader’s visit to Washington this week.  Meanwhile, reports that Lebanese Hezbollah guerrillas were involved in fighting for Syria's president Bashar al-Assad caused alarm the civil war might spread to neighbouring oil producers and interrupt production there.

For the next week expect downward trend to be continued.

Product

380 cSt HSFO

380 cSt LSFO

 

 

 

Rotterdam 2013-05-23

572

592

Rotterdam 2012-05-23

617

665

 

 

 

Gibraltar 2013-05-23

597

648

Gibraltar 2012-05-23

652

708

 

 

 

St Petersburg 2013-05-23

536

565

St Petersburg 2012-05-23

475

550

 

 

 

Panama Canal 2013-05-23

595

675

Panama Canal 2012-05-23

637

-

 

 

 

Busan 2013-05-23

615

782

Busan 2012-05-23

657

-

 

 

 

Fujairah 2013-05-23

594

730

Fujairah 2012-05-23

665

-

All prices stated in USD / Metric Tone
All time high Brent= $147.50 (July 11, 2008)
All time high Light crude (WTI)= $147.27 (July 11, 2008)

Product

Close May 22 

Light Crude Oil (WTI)

$94,28

Brent Crude Oil

$102,60

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