The Bunker Review was contributed by Marine Bunker Exchange (MABUX)
Oil Market close yesterday evening
Stocks rally to pare weekly loss; oil fell further yesterday.
Crude oil fell again on Thursday as lockdowns in Europe and rising cases elsewhere clouded the energy demand outlook, while stocks rose as Wall Street rallied.
France and Germany will fall back into coronavirus lockdowns next week, while cases are rising in 47 U.S. states with patients overwhelming hospitals in parts of the country.
The European Central Bank said it would increase its support for the bloc’s economy amid the pandemic, weighing on the euro even as policy was left unchanged. U.S. gross domestic product soared to a widely predicted record bounce that helped trigger stock buying on Wall Street, enough to halt the rout on equities globally so far this week.
Concerns hit commodities too, with oil again falling and down about 9% for the week so far. [O/R]
“As lockdowns begin to bite on demand concerns across Europe, the near-term outlook for crude starts to deteriorate,” said Stephen Innes, chief global market strategist at Axi.
U.S. crude recently fell 2.97% to $36.28 per barrel and Brent was at $37.77, down 3.45% on the day.
Uncertainty about Tuesday’s U.S. election also kept traders on edge. Republican President Donald Trump and Democratic rival Joe Biden will rally supporters in the battleground of Florida, visiting the same city hours apart to offer their contrasting approaches to the resurgent coronavirus pandemic.
The ECB held off on new measures on Thursday but it hinted at action in December, which is likely to keep the euro under pressure.
The dollar index rose 0.521%, with the euro down 0.61% to $1.1672.
Spot gold dropped 0.5% to $1,868.21 an ounce. Silver fell 0.47% to $23.30.
Oil Market today Friday morning
Oil made a small rebound this morning but is heading down again.
Global oil prices are heading down after a small rebound on Friday, but are on track for a second monthly fall on growing concerns that the rise in COVID-19 cases in Europe and the United States could hurt fuel consumption.
“It looks like a dead cat bounce at this stage,” said Jeffrey Halley, senior market analyst, Asia Pacific, OANDA in Singapore.
“With a European slowdown jeopardising global consumption and the return of Libyan production, the onus must now fall on OPEC+ to reconsider their 2 million barrel per day production increases in January.”
He added that oil prices are unlikely to sustain any rally in this environment short of a statement from OPEC+.
The Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, are expected to raise their output by 2 million bpd in January as part of their production agreement.
However, top producers Saudi Arabia and Russia are in favour of maintaining the group’s output reduction of about 7.7 million bpd currently into next year as renewed lockdowns in Europe are threatening to cool demand again.
Oil Future close 29th October, 2020
Brent crude: $ 37.65 (-1.47) /brl FM delivery Dec (FM=Front Month)
Light crude (WTI): $ 36.17 (-1.22) /brl FM delivery Dec
Gasoil ARA; $ 304.00 (-10.75) /mton FM delivery Nov
NY Harbor Ulsd: $ 335.07 (-7.95) /mton FM delivery Nov
Oil Futures trading at GMT 06.17; Brent: $-0.79, WTI: $-0.71.
Fuel Oil prices may decline again today, down by 13 – 15 USD/MT. (Fuel Oil, means 380 HS plus VLSFO together). MGO and NY Harbor ULSD expected to drop 8 – 11 usd/mton.
All prices are based on Oil Future close last night Thursday evening.