Bunker prices to edge down next week
The Bunker Review is contributed by Marine Bunker Exchange
Brent crude oil prices hit their lowest since late August on Wednesday on worries about growing U.S. stockpiles that could put pressure on oil prices.
American Petroleum institute data showed U.S. crude stockpiles jumped last week in a seventh week of builds. The build was also above forecasts by analysts in a Reuter’s poll. The U.S. Energy Information Administration issues official inventory data on Thursday.
Brent is trading at $45.07 per barrel down 74 cents and WTI is at $42.18 per barrel down 75 cents at GMT 14:50 on Thursday.
Surplus oil inventories are at the highest level in at least a decade because of increased global production, according to the Organization of Petroleum Exporting Countries (OPEC).
Stockpiles in developed economies are 210 million barrels higher than their five-year average, exceeding the glut that accumulated in early 2009 after the financial crises, the organization said in a report. Slowing non-OPEC supply and rising demand for winter fuels could help alleviate the current overhang, enabling a recovery in prices, it said. The group’s own production slipped last month because of lower output in Iraq.
“The build in global inventories is mainly the result of the increase in total supply outpacing growth in world oil demand,” OPEC’s Vienna based research department said in its monthly market report.
OPEC ministers will meet on Dec. 4 in Vienna to review their current policy. While some members such as Venezuela have recommended changing strategy to support prices, OPEC Secretary-General Abdalla El-Badri said on Monday that the supply and demand is on track to rebalance next year.
OPEC is trying to convince the world that demand will be better next year and beyond, but right now the world is facing a “heck of a glut”, and that glut will persist a long time at present over-production level. The big three, OPEC, U.S. and Russia must get together and solve the huge oversupply problem. That everybody is protecting their market share sounds strange and plus selling at far too low prices, and at the same time depleting their sources for a cost far below normal market value.
Oil prices have lost about 50 percent in the past year as several OPEC members pumped near record levels. Year 2009 OPEC implemented record production cuts; this time the group has signaled it won’t pare supplies to balance the global market.
For the coming week we expect bunker prices to edge downward.
*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)