Bunker Global Open Directory News2020-10-13
MABUX: Bunker Market this morning 13th October, 2020
Oil Market close, Monday evening
Oil prices settled about 3% lower on Monday as force majeure at Libya’s largest oilfield was lifted, a Norwegian strike affecting production ended and U.S. producers began restoring output after Hurricane Delta.
Brent crude settled down $1.13, or 2.6%, to $41.72 a barrel. U.S. West Texas Intermediate ended 2.9%, or $1.17, lower at $39.43.
Production in Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), is expected to rise to 355,000 barrels per day (bpd) after force majeure at the Sharara oilfield was lifted on Sunday.
Rising Libyan output will pose a challenge to OPEC+ - a group comprising OPEC and allies including Russia - and its efforts to curb supply to support prices.
“It’s a large chunk of production to come online when you don’t need any of those barrels, which is bad news for the supply side of the equation” said Bob Yawger, director of energy futures at Mizuho in New York.
Hurricane Delta, which inflicted the biggest blow in 15 years to energy production in the U.S. Gulf of Mexico last week, was downgraded to a post-tropical cyclone at the weekend.
Workers headed back to production platforms on Sunday and French oil major Total TOTF.PA restarted its 225,500 barrel per day Port Arthur refinery in Texas.
The Louisiana Offshore Oil Port (LOOP) on Monday said it has resumed operations at its offshore Marine Terminal and there are no interruptions in deliveries at the Clovelly Hub.
Front-month prices for both contracts gained more than 9% last week in the biggest weekly rise for Brent since June. But both fell on Friday after Norwegian oil companies struck a deal with labour union officials to end a strike that had threatened to cut the country’s oil and gas output by close to 25%.
Prices were also pressured by a jump in new COVID-19 cases, which has raised the spectre of more lockdowns which could dampen demand for oil.
Infections are at record levels in the U.S. Midwest. In Europe, British Prime Minister Boris Johnson announced new coronavirus lockdown measures and Italy is preparing fresh nationwide restrictions.
Oil Market today, Tuesday morning
Oil prices were steady in early trade on Tuesday, sitting on losses of nearly 3% from the previous session after supplies began to resume in Norway and the U.S. Gulf of Mexico and Libya resumed production at its largest oilfield.
The return of supply comes as resurgent COVID-19 infections in the U.S. Midwest and Europe raise worries about fuel demand growth, posing a challenge for the Organization of Petroleum Exporting Countries and its allies, together called OPEC+.
OPEC+ has curbed supply to help shore up oil prices amid coronavirus pandemic, with cuts of 7.7 million barrels per day due to hold through December. The producers’ market monitoring panel is due to meet next Monday.
“It won’t be a huge surprise if finally, the alliance decides to address the worsening situation and amend its action,” Rystad Energy’s head of oil markets, Bjornar Tonhaugen, said in a note.
U.S. West Texas Intermediate (WTI) crude futures inched up 1 cent to $39.44 a barrel at 0117 GMT, while Brent crude futures rose 2 cents to $41.74 a barrel.
With workers returning to U.S. Gulf of Mexico platforms after Hurricane Delta and Norwegian workers returning to rigs after ending a strike, all eyes were on Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), which on Sunday lifted force majeure at the Sharara oilfield.
The country’s total output on Monday was at 355,000 bpd and will double if the Sharara field gets back to pumping at the 300,000 bpd it was producing before the Libyan National Army blockaded energy exports in January.
“That would effectively add 0.3% of global oil supply in a very short time frame,” Commonwealth Bank commodities analyst Vivek Dhar said in a note.
Stoking worries about fuel demand, curbs were being tightened in Britain and the Czech Republic to battle rising cases of COVID-19, while French Prime Minister Jean Castex said he could not rule out local lockdowns.
Oil Future close 12th October, 2020
Brent crude: $ 41.72 (-1.13) /brl FM delivery Dec (FM=Front Month)
Light crude (WTI): $ 39.43 (-1.17) /brl FM delivery Nov
Gasoil ARA; $ 337.00 (-10.00) /mton FM delivery Nov
NY Harbor Ulsd: $ 356.23 (-11.14) /mton FM delivery Nov
Oil Futures trading at GMT 05.19; Brent: $+0.04, WTI: $+0.03.
Expect Fuel Oil prices to drop between 7 – 9 usd/mton
(Fuel Oil, means 380 HS plus VLSFO together).
MGO and NY Harbor Ulsd a drop of 10 – 11 usd/mton.
Above indications are based on Oil Future close last night 12 October.
The Oil Market has started slightly upward today, with a small rebound from yesterday’s drop, but in general a further drop of Oil Prices is more likely today.
More oil productions are coming on stream and no visible demand increase in sight, which is likely to push oil prices further downward. The Market is oversupplied.www.mabux.com