The Bunker Review is contributed by Marine Bunker Exchange
Brent crude oil stabilized around $85 a barrel on Thursday as strong European and Chinese data offset a slide triggered by an unexpected build up in U.S. crude stocks.
Industry activity in the euro zone grew much faster than analysts predicted in October, a purchasing managers’ index of 52.2 showed on Thursday from 49.9 in September -reading below 50 indicates contraction.
Growth in Chinese industry quickened to a three month high in October. But overall growth in the world’s largest oil importer is at its slowest since the global financial crises in 2009, and risks missing its official target for the first time in 15 years.
Oil prices are under constant pressure and stabilization risks to be short-lived due to the constant over supply of crude oil. Both benchmarks, WTI and Brent crude oil, fell sharply on Wednesday after U.S. inventory data showed a large climb in crude stocks to 7.1 million barrels last week, more than doubled the 2.7 million barrels increase that analysts had forecast.
West Texas Intermediate rebounded on Thursday from its lowest closing price in two years after government data showed crude stockpiles gained more than forecast in the U.S. Crude oil has collapsed into a bear market as producers including Saudi Arabia cut export prices. Global supplies are rising as the U.S. pumps the most in almost three decades and Russia’s output nears a post-Soviet record.
Germany is showing better numbers and created some kind of optimism for the euro zone that’s helping prices to stabilize, but at the same time but the build of inventories is weighing on prices. Data from China is not weak, but not strong either, which means Chinas’ influence on oil prices is neutral.
Saudi Arabia and Kuwait have signaled that the fall in oil prices doesn’t warrant immediate production cuts. OPEC, responsible for about 40 percent of the world’s oil supply, is scheduled to meet on 27 November in Vienna. Libya’s OPEC governor Samir Kamal said on Wednesday that OPEC had to reduce oil output by at least 500,000 barrels per day to curb oversupply of about 1 million barrels per day.
Bunker prices are expected to be stable around today’s level.
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)