Fuel indexes demonstrated irregular trend this week under the influence of the situation around Syria. The US and Europe continue to ponder launching military strikes, and the uncertainty in the country and the prospect of further instability in the region are being reflected in the fuel market, the Marine Bunker Exchange said in its Bunker Review.
President Barack Obama is trying to secure the support of key U.S. politicians for a military action against Syria and is confident Congress will authorize it. The Senate Foreign Relations Committee voted Sep.04 to support a restricted operation after Syria’s alleged use of chemical weapons, clearing the way for the full Senate to consider the resolution. At the same time Congress still remains divided about giving the U.S. president authorization to use force. The voting is expected next week.
Russia in turn raises objections to intervention saying it will only support a United Nations resolution for military strikes if there's conclusive proof the Syrian government used chemical weapons.
The main concern is that any Western involvement in Syria may draw neighbouring countries deeper into the fray, and the conflict may spill out beyond its borders. First of all it is unknown how Iran may react to military strikes. It has proven to be a steadfast supporter of the Assad regime over the last two years, despite growing international pressure, and has provided military and financial support. Iran has warned that an attack on Syria would drag the whole region into the conflict. Syria borders Iraq and is near Iran, countries that together hold almost a fifth of the output capacity from OPEC. It means that any spreading of the conflict in Syria to the wider Middle East could hit oil production and transportation.
Except of Syria market keeps an eye on other supply issues. As per the US Energy Information Administration, global supply disruptions reached 2.7 million bpd in July. In Libya a patchwork of armed militia groups still maintain control over much of the country. The lack of security has seen oil production regularly disrupted, while industrial action at Libyan ports has prevented exports. At the same time maintenance in Iraq is also expected to cut supplies. As a result there's a roughly $10 per barrel geopolitical risk premium built into the price while supply disruptions elsewhere in the market underpinned prices.
At the same time demand for oil has increased as the US and Europe recover from recession, and demand from China has also held up. Eurozone businesses had their best month in more than two years in August, and growth in the services sector in China hit a five-month high. Market is also waiting on U.S. jobs data to be released on Sep. 06 as a gauge of economic recovery, and a clearer indication from the Federal Reserve as to when it may rollback in its monetary stimulus program, largely seen as supporting commodities prices. It must also be taken into consideration that the Fed's decision has been complicated by the potential military strike on Syria that could upset global fuel market.
We expect upward trend in bunker fuel prices next week on the possibility of military strikes in Syria.
|
Product |
380 cSt HSFO |
380 cSt LSFO |
|
|
|
|
|
Rotterdam 2013-09-05 |
599 |
622 |
|
Rotterdam 2012-09-05 |
650 |
719 |
|
|
|
|
|
Gibraltar 2013-09-05 |
625 |
660 |
|
Gibraltar 2012-09-05 |
677 |
750 |
|
|
|
|
|
St Petersburg 2013-09-05 |
552 |
586 |
|
St Petersburg 2012-09-05 |
465 |
480 |
|
|
|
|
|
Panama Canal 2013-09-05 |
637 |
698 |
|
Panama Canal 2012-09-05 |
668 |
827 |
|
|
|
|
|
Busan 2013-09-05 |
628 |
725 |
|
Busan 2012-09-05 |
700 |
- |
|
|
|
|
|
Fujairah 2013-09-05 |
608 |
720 |
|
Fujairah 2012-09-05 |
680 |
- |
All prices stated in USD / Mton
All time high Brent = $147.50 (July 11, 2008)
All time high Light crude (WTI) = $147.27 (July 11, 2008)
|
Product |
Close Sep. 05 |
|
Light Crude Oil (WTI) |
$107,23 |
|
Brent Crude Oil |
$114,91 |