EMEA News
Low Oil Prices to Hit OW Bunker Q3 Earnings
Due to the recent plummet of oil prices, Denmark-based fuel supplier OW Bunker A/S says it expects it 2014 profit to come in 20 percent lower than the previous year, Platts reports.
"We have seen an exceptional fall in the oil price in the recent weeks and there is considerable uncertainty about the short-term development," CEO Jim Pedersen said.
Despite forecasting marine fuel sales volumes to jump 10 percent by the end of 2014, earlier this month OW Bunker said that it expected to report a $22 million loss in the third quarter.
The company previously projected a profit increase for 2014 due to rising sales volume.
"If the oil prices rise again, we will gain on our derivative contracts, but it is unlikely that such gain will be adequate to offset our short-term costs and allow us to meet the previously announced earnings forecast for the year," Pedersen said.
As of October 7, 2014, the front month price of Brent crude oil was down almost $8 per barrel over the past month and down more than $17 per barrel over the past three months.
Brent crude originally jumped to a nine-month high back in the second half of June.
The company said it did not expect the projected loss to affect performance in the long term.
OW announced back in August that sale volumes in the second quarter had increased 7 percent year-over-year due to increased activity in Asia and the Americas.
