The Bunker Review is contributed by Marine Bunker Exchange
Saudi Oil Minister says OPEC will with others stabilize the oil Market. Saudi Arabia is now working with other OPEC members and producers from outside the group to stabilize the market, Saudi Oil Minister Ali al-Naimi said.
The world economy is going through an unstable situation, al-Naimi said. Crude demand is expected to rise by 1 million barrels a day every year in this decade, and the world requires more investments in oil to compensate for decline rates, he said.
Saudi Arabia is cooperating with OPEC and non-OPEC countries to stabilize the market. Billions of dollars are needed for exploration and producing oil and to invest in spare capacity to stabilize the market, said the Saudi Oil Minister.
Threatened by surging production mainly from North America and Russia, the Organization of Petroleum Exporting Countries has been pumping above its quota for 17 months as it seeks to take market share from higher-cost regions.
Oil prices rose on Thursday with some investors keen to buy at what they think are bargain levels, but persistent glut of crude oil will push oil prices down again. Overall, oil markets remain oversupplied, with rising U.S. stockpiles the most visible evidence.
Traders are preparing for another downward turn in prices by March 2016, market data suggest, as what is expected to be an unusually warm winter dents demand just as Iran’s resurgent crude exports hit global markets after sanctions end.
Goldman Sachs said on Thursday there was still a downside risk to oil prices, as storage utilization continues to climb. The bank added that “we don’t believe that current prices present an appealing entry point”. Because of the glut, producers are scrambling to offer discounts in an effort to defend market share against their competition.
OPEC’s second biggest producers, Iraq, has started to sell some crude grades for as little as $30 a barrel, trade sources said, acting as a further drag on futures.
When will this downward trend stop? Perhaps December 4th when OPEC has their end-of- year meeting one could probably expect some interesting news.
For the coming week we expect bunker prices to continue the downward trend.
*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)