Market specialist predicts irregular trend in bunker prices in medium-term perspective
The price of fuel has changed back and forth for the last two weeks as U.S. lawmakers attempted to resolve an impasse that has left the U.S. government partially closed and the markets worried about the U.S. defaulting on its debt. Both Democrat and Republican leaders floated different plans to counter an emerging Senate deal to reopen the government and forestall a default on U.S. obligations. As a reflection of the situation Fitch Ratings has even warned it could cut the sovereign credit rating of the United States from AAA, the market expert Marine Bunker Exchange (MABUX) said in its weekly review.
Finally a deal was concluded, helping the world's biggest economy tide over the immediate crisis. It suspended the limit through Feb. 7, 2014, fund the government through Jan. 15 and require a House-Senate budget conference by Dec. 13. But it is clear that without a long-term solution the same issues may take effect again a few months later.
Fuel and other markets could be very volatile for the next few weeks because of the shutdown of the U.S. government . Specifically oil traders are losing a key weekly report on supplies as the Energy Information Administration ceased operations and furloughed staff, stopping publications of its weekly oil inventory data this week for the first time since 1979 due to a lack of government funding. So the market took the report published by industry group the American Petroleum Institute (API) on Oct.16 as a reference point. As per it, stockpiles U.S. crude supplies climbed by 5.94 million barrels last week.
In China, exports dropped 0.3 percent from a year earlier reflecting weak global demand. However, an unexpected decline in exports was moderately offset by data showing China's crude oil imports rebounded in September to a record high. Chinese GDP data will be released on Oct. 18.
The start of talks in Geneva on Iran's nuclear program between the Islamic Republic and Western powers also weighed on prices. Traders are speculating about the end of U.S.-led sanctions against Iran, allowing Tehran to increase oil exports which have fallen by over 1 million barrels a day over the past two years. It has been declared already that Iran and world powers may hold another round of negotiations in two weeks - a sign that compromises offered by the Persian Gulf country over its dis-puted nuclear program are being taken seriously. It is forecasted that oil prices could fall around $10 per barrel should the talks lead to easing sanctions.
Meanwhile, South Korea more than doubled its Iranian crude imports to 140,000 barrels a day in September from August. Still, volumes remain close to the target of cutting shipments for the June-November period by 15 percent to extend a U.S. sanctions waiver for another six months. To win waivers, Iran's crude buyers must continually reduce their shipments. Japan won its fourth six-month waiver last month, while Iran's other top buyers, China, India and South Korea, have to renew exemptions in early December.
There are also some expectations on the fuel market that the prices may fall soon, because supplies appear to be plentiful. In its latest quarterly oil market report, the International Energy Agency pre-dicted strong growth in non-OPEC supplies of crude oil, easily outpacing demand growth next year. IEA also said that the United States would overtake Russia next year as the largest non-OPEC producer of liquid fuels.
We expect the irregular trend in bunker prices will be predominant next week.
|
Product |
380 cSt HSFO |
380 cSt LSFO |
|
|
|
|
|
Rotterdam 2013-10-17 |
591 |
612 |
|
Rotterdam 2012-10-17 |
615 |
651 |
|
|
|
|
|
Gibraltar 2013-10-17 |
614 |
649 |
|
Gibraltar 2012-10-17 |
645 |
695 |
|
|
|
|
|
St Petersburg 2013-10-17 |
410 |
430 |
|
St Petersburg 2012-10-17 |
480 |
575 |
|
|
|
|
|
Panama Canal 2013-10-17 |
608 |
672 |
|
Panama Canal 2012-10-17 |
660 |
843 |
|
|
|
|
|
Busan 2013-10-17 |
640 |
729 |
|
Busan 2012-10-17 |
646 |
842 |
|
|
|
|
|
Fujairah 2013-10-17 |
610 |
730 |
|
Fujairah 2012-10-17 |
640 |
- |
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 Oct. 16 |
|
Light Crude Oil (WTI) |
$102,29 |
|
Brent Crude Oil |
$110,59 |