Lower Bunker Prices Ahead as Brent Closes Under $29 and Analysts Warn Bottom Not Yet Reached

Analysts believe oil prices are likely to fall even further.

Brent crude Friday fell under $30 per barrel, closing at $28.94, and analysts are bracing for further declines this week now that sanctions against Iran have been lifted, allowing the country to return to the international oil export market.

U.S. crude futures meanwhile, closed at $29.42 per barrel on Friday, down $1.78 or 5.71 percent, and Carsten Fritsch, an analyst for Commerzbank, remarked that $25 per barrel in the immediate future "is quite possible, but not much lower than that."

To date, 2016's losses for futures are over 20 percent, the worst two-week drop since 2008.

Other pundits worry that Iran's return to exporting, combined with the Shanghai index ending on its lowest close since 2014 as well as U.S. retail sales/industrial production for December weaker than expected, indicates that the scenario of too much oil and not enough demand will continue.

Phillip Futures said in a note, "It is the wrong time for Iran to be returning to the oil market, both for the market and likely also for Iran."

Ship & Bunker data Friday showed IFO380 bunker prices in Rotterdam and Houston had fallen to $114.50 pet metric tonne (pmt) and $122.50 pmt respectively, but the prospect of even lower prices for buyers this week is now very real.

With analysts girding themselves for an anticipated ease of demand in coming weeks as refiners shut down for spring maintenance, one relatively calm voice is that of Goldman Sachs, which in a report maintains its prediction of $40 per barrel for U.S. crude for the first half of 2016.

It states, "The key theme for 2016 will be real fundamental adjustments that can rebalance markets to create the birth of a new bull market, which we still see happening in late 2016."

KPI Bridge Oil's Mohammed Marzuq last week said that while it's difficult to predict how far prices can plummet, warned that it shouldn't be a surprise "if prices reach $20.00 a barrel."