News

2019 April 18 09:36

Bunker Market this morning, April 18

The Bunker Review was contributed by Marine Bunker Exchange

Oil settles lower as U.S. inventories disappoint market yesterday

Crude prices declined slightly on Wednesday as U.S. government data showed inventories drew down less than an industry report had suggested on Tuesday.

Brent crude rallied to its highest level this year early in the session, bolstered by an unexpected drop in U.S. crude inventories reported by trade group the American Petroleum Institute late on Tuesday. However, official data from the Energy Information Administration on Wednesday showed a 1.4 million-barrel crude drawdown, about half the API’s reported decline.

“The rally overnight was predicated on a 3 million-barrel-per-day draw in crude that did not materialize,” said Bob Yawger, director of energy futures at Mizuho in New York. “You’re going to need another catalyst.”

Brent crude futures settled down 10 cents at $71.62 a barrel. During the session, the contract touched an intraday high $72.27 a barrel, the highest this year.

U.S. West Texas Intermediate (WTI) crude futures settled down 29 cents per barrel at $63.76 a barrel. The contract touched an intraday high of $64.61 a barrel, just shy of a 2019 high of $64.79 hit last week.

Crude continued to be supported by steady economic growth in China.

China’s economy grew by 6.4 percent in the first quarter, official data showed, defying expectations for a further slowdown and assuaging global markets as a U.S.-China trade deal also appears near.

Prices have been supported this year by a pact reached by the Organization of the Petroleum Exporting Countries and allies, including Russia, to limit their oil output by 1.2 million barrels per day. Global supply has been tightened further by U.S. sanctions on OPEC members Venezuela and Iran.

Today's Oil Market expectation

Oil prices slip amid ample U.S. output, Brent drifts away from five-month high

Oil prices dropped on Thursday as the impact of plentiful U.S. production offset a surprise decline in U.S. inventories, leaving international benchmark Brent retreating from a five-month high touched in the previous session.

Brent crude futures were at $71.42 a barrel at 0235 GMT, down 20 cents, or 0.3 percent, from their last close. Brent fell 0.1 percent on Wednesday, after earlier touching its highest since Nov. 8 at $72.27 a barrel.

U.S. West Texas Intermediate (WTI) crude futures were at $63.69 per barrel, down 7 cents, or 0.1 percent, from their previous settlement. WTI closed the last session down 0.5 percent.

U.S. crude inventories fell by 1.4 million barrels in the week to April 12, compared with analyst expectations for an increase of 1.7 million barrels, Department of Energy (DoE) showed on Wednesday.

"A persistent rise in U.S. oil output, together with lingering demand-side concerns emerging from the U.S.-China trade dispute, is limiting price gains," Abhishek Kumar, Head of Analytics at Interfax Energy in London. Graphic: U.S. crude inventories, weekly changes since 2017.

The price changes have been marginal for a few days now. It is difficult to determine why the market is behaving like it does. The small price adjustments could very well be from traders clearing or adjusting their accounts to be ready for action. The market is in a waiting mood.

The U.S. Inventory

U.S. crude inventories fell by 1.4 million barrels in the week to April 12, compared with analyst expectations for an increase of 1.7 million barrels, Department of Energy (DoE) showed on Wednesday.

“The unexpected drawdown in U.S. commercial crude oil stocks was balanced by lower-than-expected withdrawals in the country’s gasoline and distillate inventories,” Kumar said.

Gasoline stocks fell by 1.2 million barrels, less than analysts’ expectations in a Reuters poll for a 2.1 million-barrel drop.

Distillate stockpiles, which include diesel and heating oil, fell 362,000 barrels, also not as much as forecasts for a 846,000-barrel drawdown, the EIA data showed.

Net U.S. crude imports fell last week by 659,000 barrels per day.

Oil Future close 17th April:
Brent: $71.62(-0.10) pbr
WTI: $63.76(-0.29) pbr
MGO: $637(+3.50) /mton
NY Harbor Ulsd: $637.02(-4.01) /mton

Oil Futures trading at GMT: 06.08; Brent:-5 cents. WTI: -1 cent
Market tendency at a standstill.

Expect bunker prices little change today based on Oil Future close last night.