MABUX: Bunker market this morning, Apr.17
The Bunker Review was contributed by Marine Bunker Exchange
Oil rally stalls on talk of OPEC+ boosting output
Oil up 1 percent as market focuses on supply risks yesterday.
Oil prices rose 1 percent on Tuesday, as fighting in Libya and falling Venezuelan and Iranian exports raised concerns over tightening global supply, but uncertainty surrounding an OPEC-led production cut limited gains.
Brent crude futures rose 54 cents, or 0.8 percent, to settle at $71.72 a barrel. U.S. West Texas Intermediate (WTI) crude futures gained 65 cents, or 1 percent, to settle at $64.05 a barrel.
Prices extended gains in post-settlement trade after data from industry group the American Petroleum Institute showed that U.S. crude inventories fell unexpectedly last week, dropping by 3.1 million barrels, versus analysts’ expectations of a 1.7 million-barrel build.
Gasoline stockpiles fell by 3.6 million barrels, the API said, more than forecasts of a 2.1 million-barrel drop.
U.S. government data is due to be released today Wednesday.
In Libya, fighting between Khalifa Haftar’s Libyan National Army and the internationally recognized government has raised the prospect of lower supplies from the OPEC member.
U.S. sanctions on two other members, Iran and Venezuela, are already cutting shipments. Iran’s crude oil exports have dropped in April to their lowest daily level this year, tanker data showed and industry sources said.
“Global supply is falling faster than people think. The market is imbalanced,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “The continuing loss of Venezuelan oil is going to take its toll. The OPEC cuts are going to take their toll.”
Oil prices have gained this year more than 30 percent, helped by the deal between the Organization of the Petroleum Exporting Countries and other producers including Russia. The group has been cutting output since Jan. 1 and will decide in June whether to continue the arrangement.
Gazprom Neft, the oil arm of Russian gas giant Gazprom, expects the global oil deal between OPEC and its allies to end in the first half of the year, a company official said on Tuesday.
Russia and the producer group may decide to boost output to fight for market share with the United States.
What can be expected from the oil market today?
Oil prices are rising for a second day on China demand, U.S. stockpile drop
Oil prices rose for a second day on Wednesday on signs of strong demand from refineries in China, the world’s second-largest crude user, amid tightening supply as producers curtail output and as oil inventories in the United States fell unexpectedly.
“Crude oil futures edged up as market sentiments were buoyed by a surprise drawdown in U.S. crude oil inventories and tighter market fundamentals in the current term,” said Benjamin Lu, commodities analyst at Singapore-based brokerage Phillip Futures.
China’s refinery throughput in March rose 3.2 percent from a year earlier to 53.04 million tonnes, or 12.49 million barrels per day (bpd), data from the National Bureau of Statistics showed on Wednesday.
The steady demand growth in China is occurring as a deal between the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, to limit their output by 1.2 million bpd in 2019 has curtailed global supplies.
The tightening supply and demand fundamentals have pushed WTI up more than 40 percent this year and Brent up by more than 30 percent.
In June, OPEC and its partners will decide whether to continue to curb their production, although concerns have arisen over Russia’s willingness to stick with the cuts.
Oil Future close 16th April:
NY Harbor Ulsd: $641.03(+6.53)/mton
Oil Futures trading at GMT: 05.47; Bret:+31 cents, WTI:+44 cents
The general tendency is upward.
Expect bunker prices to rise today: Fuel Oil world wide plus 3-4 usd/mton.
ICE MGO up 4 usd/mton and NY Habor Ulsd up 6 usd/mton.