Sharp Fall for Crude in Early Trading on Failed Doha Talks, Could be $30 "Within Days"

One analyst says crude could touch $30 a barrel "within days"

Oil markets Monday were down sharply during early Asian trading hours after the continent woke to discover Sunday's meeting of oil producers in Doha had failed to reach any deal on oil output.

Brent was down around 5 percent and slipped under $41 a barrel, and WTI was down around 5.5 percent nearing $38 a barrel, before both benchmarks recovered slightly.

Bunker buyers should expect their quotes to head in a similar direction today, but be mindful that markets have shown a willingness to swing on the slightest rumour.

As Ship & Bunker earlier reported, the meeting of Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers intended to freeze oil production ended with Qatar Oil Minister Mohammed Saleh Abdulla Al Sada saying, "The general conclusion was that we need more time to consult among ourselves in OPEC and non-OPEC producers."

Crude had been making gains in the run up to the Doha talks, with Brent rising from under $36 per barrel on April 5, to over $44 per barrel last week.

That pushed last Thursday's average IFO380 bunker price across 20 primary bunkering ports tracked by Ship & Bunker (Global 20 Ports Average*) to $196.50 per metric tonne (pmt), having been sat at $175.00 pmt on April 5.

Some analysts say most of crude's gains could now be wiped out in just days.

"This is an extremely bearish scenario," said Natixis oil analyst Abhishek Deshpande.

"Prices could touch $30 a barrel within days."

If oil does tumble to $30, based on the current relationship with Brent, average IFO380 prices would fall back to under $140 pmt in some of the primary ports.

A more conservative tumble to $35 a barrel should still see bunkers dip under $160 pmt.

* Global 20 Ports Average is the linear average of the following 20 major bunkering ports: Busan, Colombo, Durban, Fujairah, Gibraltar, Hong Kong, Houston, Istanbul, LA/Long Beach, Las Palmas, Mumbai, New York, Panama, Piraeus, Rotterdam, Santos, Shanghai, Singapore, St Petersburg, Tokyo.