Bunker market likely to move sideways next week, expert says
The Bunker Review is contributed by Marine Bunker Exchange (MABUX)
On Thursday West Texas Intermediate (WTI) traded near its highest closing level in three weeks before weekly government data on US inventories on signs the economic recovery in developed nations is gaining strength. Bank of America Corp. predicted that WTI may soon advance to $100 a barrel because of a tight US market. Others including MABUX do not believe the upward trend for the WTI will be long lived since an overproduction of crude oil is expected any time soon. With the US producing almost 9 million barrels of crude oil a day, which equals to volumes from the 70:s. Iran is now coming on stream again with a capacity of 3 million barrels a day plus Libya seems to have restarted from almost a zero level, which means market cannot absorb the increased flow of crude oil. The described scenario will push oil prices downward. The International Energy Agency (IEA) predicted that the total demand for crude oil will increase 2014 by 1.3 million barrels per day to a total of 92.5 million barrels day.
Global Risk Management Ltd in Middelfart, Denmark, says that improved global growth expectations leading to increased oil demand is potentially bullish for oil and prices could probably remain at around current levels for the rest of this month.
Looking at the Oil Future forward contracts for Brent and WTI one can see the market is in backwardation. A market in which short term supplies cost more than later deliveries is said to be in backwardation.
The start of a crude pipeline from the US storage hub at Cushing in Oklahoma to refineries on the Gulf coast relieves any glut in the Midwest. The subsequent build-up of supplies at the Gulf Coast will prevent additional price gains.
We expect the bunker prices will move sideways.
|
Product |
380 cSt HSFO |
380 cSt LSFO |
|
|
|
|
|
Rotterdam 2014-01-23 |
563 |
593 |
|
Rotterdam 2013-01-23 |
608 |
638 |
|
|
|
|
|
Gibraltar 2014-01-23 |
599 |
646 |
|
Gibraltar 2013-01-23 |
625 |
680 |
|
|
|
|
|
St Petersburg 2014-01-23 |
400 |
460 |
|
St Petersburg 2013-01-23 |
520 |
580 |
|
|
|
|
|
Panama Canal 2014-01-23 |
597 |
672 |
|
Panama Canal 2013-01-23 |
645 |
750 |
|
|
|
|
|
Busan 2014-01-23 |
650 |
713 |
|
Busan 2013-01-23 |
658 |
828 |
|
|
|
|
|
Fujairah 2014-01-23 |
620 |
- |
|
Fujairah 2013-01-23 |
611 |
730 |
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 Jan. 22 |
|
Light Crude Oil (WTI) |
$96,73 |
|
Brent Crude Oil |
$108,27 |