The Bunker Review is contributed by Marine Bunker Exchange
Brent crude oil held steady just below $114 a barrel on Thursday, with traders watching developments in Iraq for the possibility of export disruption from OPEC’s second largest producer. Oil hit a nine-month high a week ago on fears that conflict in Iraq could split the country and hit oil exports, but is has since retreated slightly as production has been largely unaffected by the fighting. Iraq’s southern oilfields, which produce the majority of the nation’s 3.3 million barrels a day, remained safe, said Nickolay Mladenov, United Nations special envoy to Iraq. – But insurgents and Iraq government forces continued to fight on Wednesday for control of the country’s largest refinery, the 300.000 barrels per day Baiji complex, with troops being airlifted into the site by helicopter.
Brent is trading at $113,52 a barrel by 13:25 CET on Thursday, having fallen in the past four sessions after hitting its highest since September at $115.71 a barrel last Thursday. Brent may retreat to $110 a barrel because Iraqi output has been unaffected by the violence. The insurgence has so far not led to any disruption of supplies from Iraq to the global market yet.
Iraq’s self-ruling Kurds outlined plans on Wednesday to ramp up oil exports now that their forces have seized control of Iraq’s main northern oilfields.
The WTI crude fell 14 cents to $106.36 a barrel by 13:25 CET on Thursday. It had gained 47 cents in the previous session on news Washington would allow exports of condensate, an ultra-light oil, in a marginal relaxation of a 40-year ban on US crude oil export. Enterprise Products Partner, one of two companies given Department of Commerce approval on Tuesday to export condensate, said it could start exporting any time.
Also putting pressure on oil prices, US crude inventories unexpectedly rose by 1.7 million barrels last week to 388 million barrels, data from the US government’s Energy Information Administration showed. Global growth remains weak so there are no demands factors to pull oil prices higher.
Traders are also keeping an eye on the threat of further sanctions on Russia by Western powers if Moscow does not do more to defuse the conflict between pro-Russian separatists and Kiev in eastern Ukraine.
For the coming week we expect irregular price movements
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)