The Bunker Review is contributed by Marine Bunker Exchange
Oil prices began with a downward trend in the morning, but recovered around lunch and Brent and WTI are firming as the dollar weakened, despite OPEC forecast of lower demand for its oil this year and another cut in oil price forecasts by a major U.S. bank. Oil and other commodities are priced in dollars and tend to gain when the U.S. currency falls.
Brent crude oil was up 65 cents a barrel at $49.34 a barrel by 1240 GMT, at a small premium to U.S. crude, which was trading at $49.25 a barrel, up 67 cents. Earlier in the day the North Sea crude oil contract slipped below U.S. crude, reflecting a very weak seaborne spot oil market. Dollar weakness provided some relief from what was otherwise and overwhelmingly negative picture for oil.
In OPEC’s monthly report, the forecast demand for the group‘s oil would drop to 28.78 million barrels per day in 2015, down 140 000 barrels per day from its previous expectation. OPEC also trimmed its projection for the rate of growth in non-OPEC supply partly due to a slowdown in the U.S. shale boom, despite drilling subsides due to high cost and a potentially sustained low oil price. – But OPEC still expects U.S. oil production to increase by almost 1 million barrels per day even with much lower oil prices.
U.S. investment Bank of America Merrill Lynch lowered its oil forecasts on Thursday saying that Brent could go as low as $31 by the end of the first quarter of 2015.
Iraq plans to boost monthly crude oil exports from its southern ports to a record high level in February, trade sources said on Thursday.
Iraq’s State Oil Marketing Organization has allocated 3.3 million barrels per day of Basra crude to be shipped out in February, up from 2.7 million barrels per day in January.
For the coming week expect bunker prices to stabilize around present level for a start but bunker prices are expected to continue downward further due to the vast oversupply of oil.
* MGO LS
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)