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.
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Product |
380 cSt HSFO |
380 cSt LSFO |
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|
|
Rotterdam 2013-05-23 |
572 |
592 |
|
Rotterdam 2012-05-23 |
617 |
665 |
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|
|
|
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Gibraltar 2013-05-23 |
597 |
648 |
|
Gibraltar 2012-05-23 |
652 |
708 |
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|
|
|
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St Petersburg 2013-05-23 |
536 |
565 |
|
St Petersburg 2012-05-23 |
475 |
550 |
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|
|
|
|
Panama Canal 2013-05-23 |
595 |
675 |
|
Panama Canal 2012-05-23 |
637 |
- |
|
|
|
|
|
Busan 2013-05-23 |
615 |
782 |
|
Busan 2012-05-23 |
657 |
- |
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|
|
|
|
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 |