MABUX: Bunker prices to edge downward next week
The Bunker Review is contributed by Marine Bunker Exchange
Brent crude oil is holding around $49 a barrel on Thursday as speculators buying on hopes for a price rebound. Traders are buying and putting oil into storage may be holding present price level for now. The market believes in some kind of consolidating phase. Some market players believe such buying to store has provided a false bottom in the market, and when land storage becomes filled, or floating storages for that matter and speculations fail, there will probably be another selloff in future contracts. Some analysts are suggesting Brent crude oil test $40 or lower. – The reason for this pessimism is the production war within OPEC as Saudi and Iraq both seek to maximize sales and U.S. production has not started to slow down.
The West Texas Intermediate (WTI) oil traded near the lowest price in almost six years in New York after U.S. crude stockpiles climbed to the highest level since at least 1982.
The WTI futures were little change following Wednesday’s 3.9 percent drop. Crude inventories in the U.S., the world’s biggest oil consumer, expanded by 8.87 million barrels to all-time high 406.7 million last week, the Energy Information Administration reported. This is a huge build up in U.S. crude oil stocks.
Oil has collapsed about 40 percent since the Organization of Petroleum Exporting Countries (OPEC) decided to maintain its output target on Nov. 27, challenging non-OPEC producers to curb their supplies first to alleviate a global surplus. U.S. production rose to the highest since at least 1983 last week, Energy Department data showed, signaling that non-OPEC output hasn’t yet faltered.
For the coming week bunker prices are expected to edge downward due to the surplus of oil.
* 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)
