The Bunker Review is contributed by Marine Bunker Exchange
Oil prices slid in early trading on Wednesday after U.S. Energy Information Administration data showed domestic crude stocks rose 10.3 million barrels last week, more than double the build forecast by analysts. It was the eighth straight week of record highs for total inventories.
After a steep slide earlier in the week, losses on the U.S. data were somewhat muted as market bulls noted that stockpiles grew much less than expected in the Cushing, Oklahoma storage hub. Within two hours of that data, prices bounced after Tehran’s ambassador to the International Atomic Energy Agency, Reza Najafi, said no deal had been reached on the duration of any possible agreement covering Iran’s nuclear program.
Saudi Oil Mininster Ali al-Naimi said in a speech delivered in Berlin that he expected supply and demand of oil to reach a balance soon. His remarks came after a hike on Tuesday in official selling prices of Saudi crude delivered to Asia and the United States. The Minister’s statement can be considered as trying to talk the price for oil upwards, it is hardly likely the balance will be reached any time soon yet between supply and demand. The market has still a long way to go.
U.S. crude stocks rose more than twice as much as expected last week, while gasoline stocks increased and distillate inventories fell, data from the Energy Information Administration (EIA) showed on Wednesday. Crude inventories rose by 10.3 million barrels in the last week to 444.37 milliion, compared with analyst’s expectations for an increase of 4.2 million barrels. Overall, it’s another bearish sign that market is far from being stable.
On Wednesday WTI gained as the Federal Reserve said most of the economy continued to expand from January through mid-February, with consumer spending rising, manufacturing gaining, and businesses optimistic about sales.
Saudi Arabia led a November decision by OPEC to maintain output and defend market share against U.S. shale producers, exacerbating a glut that drove prices almost 50 percent lower in 2014.
There is no funDamental reason for oil to go higher. Supply will continue to build.
For the coming week again the market believes bunker prices will continue its volatility – one day up and next day down.
* 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)