Bunker prices to continue bearish trend next week

The Bunker Review is contributed by Marine Bunker Exchange

WTI Crude Oil slipped below $90 for the first time in 17 months as fracking drives U.S. output to its highest in four decades. Oil Futures dropped as much as 1.6 percent to $89.31 a barrel on Wednesday in New York, bringing the decline this year to 9.3 perecent. U.S. crude output will rise next year to the highest since 1970, the Energy Information Administration forecast.

The shale boom has turned the U.S. into the world’s largest producer of liquid petroleum reducing its appetite for imports just as the pace of global demand is slowing. The supply of oil is more than enough and the demand is not catching up. The U.S production is much more than first anticipated from the start of shale oil fracking. WTI has been trading on Thursday between $91- 88.18 per barrel in New York, trading below $90 per barrel for the first time since April 24, 2013. Oil Futures declined 13 percent in the three months to September 30, the worst quarterly performance for the suppliers in more than two years.

Saudi Arabia reduced the price for Arab Light to Asia by $1 a barrel to a discount of $1.05 to the average of Oman and Dubai crude, the lowest since December 2008. The price reduction followed a cut of 408 000 barrels a day in Saudi production in August to 9.6 million a day. The real story seems to be that the Saudis want to protect their market share and not act as an OPEC swing producer, as they have done sometimes in the past.
 
Russian oil output rose close to a post-Soviet era record last month to 10.61 million barrels a day, a sign that the biggest source of revenue for President Vladimir Putins’ government has yet to be eroded by the U.S. and European sanctions. The sanctions imposed by U.S. and Europe have had very little impact so far, but will probably be more noticeable beginning of next year 2015.

Bunker prices are expected to go further down next week.


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)