MABUX: Bunker market this morning, Apr.15

The Bunker Review was contributed by Marine Bunker Exchange

Oil dips, supply issues in focus today Monday.

Oil prices edged lower on Monday after international benchmark Brent hit a fresh five-month high in the previous session, but concerns over global supplies kept prices well supported.

Brent crude oil futures were at $71.46 a barrel at 0233 GMT, down 9 cents, or 0.1 percent, from their last close, having hit their highest since Nov. 12 on Friday at $71.87.

U.S. West Texas Intermediate (WTI) crude futures were at $63.63 per barrel, down 26 cents, or 0.4 percent, from their last settlement.

“I would expect oil to trade in a relatively tight band around $70 per for the time being,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore, pointing to mixed signals on supply from the United States and OPEC and its allies.

The head of Libya’s National Oil Corp warned on Friday that renewed fighting could wipe out crude production in the country.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies meet in June to decide whether to continue withholding supply. OPEC, Russia and other producers, are reducing output by 1.2 million bpd from Jan. 1 for six months.

“Leading edge indicators on U.S. supply suggest activity levels are stepping up which is supportive for strong production growth in the second half,” said Chauhan

But at the same time, “murmurings from various ministers of the OPEC+ pact suggest supply from the group will not be ramped up pre-emptively as per last summer,” he said.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies meet in June to decide whether to continue withholding supply. OPEC, Russia and other producers, are reducing output by 1.2 million bpd from Jan. 1 for six months.

“Leading edge indicators on U.S. supply suggest activity levels are stepping up which is supportive for strong production growth in the second half,” said Chauhan

But at the same time, “murmurings from various ministers of the OPEC+ pact suggest supply from the group will not be ramped up pre-emptively as per last summer,” he said.

Oil Market Friday Close
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Oil prices rose 1 percent on Friday as involuntary supply cuts from Venezuela and Iran plus conflict in Libya supported perceptions of a tightening crude market, while upbeat Chinese economic data eased concerns about waning crude demand.

The oil market also followed global stock markets higher after strong earnings at JPMorgan Chase & Co. The dollar index slipped to its lowest against the euro in more than two weeks, making crude cheaper for non-U.S. buyers.

“Equities are getting off to a good start with earnings season and the dollar index being weaker helps reaffirm confidence in the oil market,” said Phil Streible, senior commodities strategist at RJO Futures in Chicago.

Brent crude oil futures rose 72 cents, or 1.02 percent, to settle at $71.55 a barrel. U.S. West Texas Intermediate (WTI) crude futures ended the session up 31 cents, or 0.5 percent, at $63.89 a barrel.

Both benchmarks notched a weekly gain of about 1 percent, which was Brent’s third consecutive week of gains and the sixth straight rise for WTI.

Oil markets have been lifted by more than 30 percent this year by supply cuts led by the Organization of the Petroleum Exporting Countries and U.S. sanctions on oil exporters Iran and Venezuela, plus escalating conflict in OPEC member Libya.

“Geopolitically infused rallies could shoot prices toward or even past the $80 per barrel mark for intermittent periods this summer,” RBC Capital Markets said in a note.

The head of Libya’s National Oil Corporation warned on Friday that renewed fighting could wipe out crude production in the country.

Bombing by a warplane occurred on Friday near the Mellitah oil and gas plant, jointly operated by Italy’s ENI and Libyan state oil firm NOC, a Libyan National Army (LNA) military source and residents said. The plant supplies Italy with gas through the Greenstream pipeline.

Oil Future close 12th April:
Brent: $71.55(+0.72)pbr
WTI: $63.89(+0.31)pbr
MGO: $633(+6.0)/mton
NY Harbor Ulsd: $637.49(+1.08)/mton

Oil Futures trading at GMT: 05.50; Brent:-25 cents, WTI:-34 cents
Market tendency at writing downward.

Bunker prices change based on Oil Future close Friday, expect Fuel Oil increases by 5-6 usd/mton.
ICE MGO increases by 6 usd/mton and NY Harbor Ulsd up 1-2 usd/mton.