The Bunker Review is contributed by Marine Bunker Exchange
OPEC is determined to keep pumping vigorously to defend market share. This is difficult for a bystander to understand. Wouldn’t it be better to pump less and hopefully sell at a higher price? As it is now Saudi Arabia is just throwing away their wealth.
The determination to keep pumping oil to defend market share, alarming some of the group’s weaker members who fear prices may slump towards $20. OPEC has been extremely explicit that it will not cut production in the face of low prices, and with Iran coming back to the market, it will produce more than 32 million barrels per day against present level of about 30 million.
Still, while stockpiles are high and rising in the United States and many European economies, in China commercial crude oil stocks at the end of October were down 4.4 percent from the previous month in their biggest drop since at least 2010.
Brent is down by nearly 8 percent in November and by 20 percent this year, after tumbling from above $115 per barrel last year. US crude had been supported on Wednesday by a smaller-than-expected build in U.S. inventories and by a fall in oil rigs, a sign that drillers were waiting for higher prices before returning to the well pad.
U.S. oil drillers have idled more than half the country’s rigs since last December, according to Baker Hughes, an oilfield-services company. The number of active machines has dropped for 12 of the past 13 weeks.
Oil has slumped more than 40 percent over the past year amid speculation a global surplus will be prolonged as U.S. inventories remain more than 100 million barrels above the five-year seasonal average and OPEC pumps above its quota.
For the coming week expect bunker prices to be irregular. One day up and the 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)