Bunker Market this morning, April 26
The Bunker Review was contributed by Marine Bunker Exchange
Brent sliped on Thursday from $75 per barrel as investors doubt rally will endure
Oil prices eased after Brent touched $75 per barrel on Thursday for the first time in nearly six months on the suspension of some Russian crude exports to Europe as investors second-guessed the market’s ability to rally further.
Brent crude futures settled at $74.35, losing 22 cents, or 0.30 percent, after rallying for most of the day to a high of $75.60, the strongest since Oct. 31.
U.S. West Texas Intermediate crude settled at $65.21 a barrel, falling 68 cents, or 1.03 percent, after hitting a session high of $66.28.
Prices began to slip just before the settlement in a technical move, analysts said.
Poland and Germany suspended imports of Russian crude via the Druzhba pipeline, citing contamination. The pipeline can ship up to 1 million barrels per day, or 1 percent of global crude demand, and about 700,000 bpd of flow was suspended, according to trading sources and Reuters calculations.
Russia, the world’s second-largest crude exporter, said it planned to start pumping clean fuel to Europe through the pipeline on April 29.
The United States this week said it would end all exemptions for buyers of Iranian oil. OPEC’s third-largest producer has been under U.S. sanctions for more than six months, but several major buyers, including China and India, were given temporary exemptions until this week. Beginning in May, those countries have to halt oil imports from Tehran or face sanctions.
Still, Brian Hook, U.S. special representative for Iran and senior policy adviser to the secretary of state, said on Thursday “there is plenty of supply in the market to ease that transition and maintain stable prices”.
Oil Market's Friday start
Oil prices ease on Friday expectation that OPEC will raise output
Oil prices dipped on Friday on expectations that producer club OPEC will soon raise output to make up for a decline in exports from Iran following a tightening of sanctions by the United States against Tehran.
The dip followed Brent’s rise above $75 per barrel for the first time this year on Thursday after Germany, Poland and Slovakia suspended imports of Russian oil via a major pipeline, citing poor quality. The move cut parts of Europe off from a major supply route.
But prices were already gaining before the Russian disruption, driven up by supply cuts led by the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) and U.S. sanctions against Venezuela and Iran. Crude futures are up around 40 percent so far this year.
To make up for the shortfall from Iran, the United States is pressuring OPEC’s de-facto leader Saudi Arabia to end its voluntary supply restraint.
Energy consultancy FGE said “the need is now very apparent for OPEC+ to take action and increase production” in order to keep markets well supplied and prevent prices from spiking.
Despite U.S. efforts to drive Iranian oil exports down to zero, many analysts expect some oil to still seep out of the country.
“A total of 400,000 to 500,000 barrels per day of crude and condensate will continue to be exported,” said FGE, down from around 1 million bpd currently.
Most of this oil would be smuggled out of Iran or go to China despite the sanctions.
China, the world’s biggest buyer of Iranian oil, this week formally complained to the United States over its unilateral Iran sanctions.
Oil Future close 25th April:
Brent: $74.35(-0.22)pbr
WTI: $65.21(-0.68)pbr
MGO: $646.25(+2.00)/mton
NY Harbor Ulsd: $$645.92(-0.19)/mton
Oil Future trading at GMT: 05.56; Brent:-13 cents, WTI:-29 cents. General Market tendency irregular, not knowing which way to go.
Expect bunker prices little change except for Fuel Oil based on NYMEX down 4-5 usd/mton.
