World News
Oil Could Sink as Low as $55 per Barrel, Pushing Bunkers Under $300 per MT
Oil prices may slide as low as $55 per barrel in the wake of The Organisation of Petroleum Exporting Countries' (OPEC) decision to maintain its production ceiling, according to an expert interviewed by Moneycontrol.com.
Investment Asia Head Hans Goetti said that OPEC's inaction was reflective of Saudi Arabia's plan to target rapid overproduction of shale gas in the U.S..
Analysis by Ship & Bunker from earlier this year showed HFO is typically priced at 70 to 76 percent of the price of crude, meaning $55 per barrel oil would translate to bunkers at major ports being $290 to $315 per metric tonne (pmt).
However, prices are unlikely to stay below $60 per barrel for very long, and will likely consolidate between $75-80 per barrel, he predicted.
"But I do not think we are going to see a return to $90 per bbl or above anytime soon," he said,
"There seems pretty much oil around and it's not necessarily the lack of demand but it's an oversupply globally."
Lukoil vice president Leonid Fedun also supported the idea that the U.S. shale gas industry would be the hardest hit, predicting that "shale gas revolution" would go the way of the dot-com bust, where weaker players will eventually be flushed out.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 548.00 | 0.50 | 677.50 | 2.00 |
| Rotterdam | 513.00 | 0.50 | 649.00 | 3.00 |
| Houston | 544.50 | 2.50 | 675.00 | 4.00 |
| Fujairah | 541.50 | 2.50 | 744.00 | 3.50 |
| Global 20 Ports Average | 572.00 | 2.50 | 758.00 | 2.50 |
| Global 4 Ports Average | 536.50 | 1.50 | 686.50 | 3.00 |
| Global Average Bunker Price | 624.00 | 2.50 | 801.00 | 3.50 |
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