Oil Falls Under $30 a Barrel

by Ship & Bunker News Team
Tuesday January 12, 2016

West Texas Intermediate (WTI) fell below $30 a barrel today for the first time since December 2003.

WTI touched $29.93 a barrel before making a slight recovery to push it back over the $30 mark.

Brent, meanwhile, has fallen as far as $30.34 a barrel today.

"Psychology has completely taken over," Stephen Schork, president of Pennsylvania-based Schork Group Inc. was quoted as saying today.

"Market sentiment has shifted so far that it's self-fulfilling. There's been a big cutback in CFTC positions, which shows that everyone is heading for the exits."

Dominick Chirichella, a senior partner at Energy Management Institute, also agreed there seems to be only one way the markets are heading.

"The momentum is too strong to the bearish side, even if fundamentally nothing has changed," he said.

Today's news follows Ship & Bunker reporting Friday that a dramatic slide in bunker prices looked set to continue, with an increasing number of players noted to be preparing for Brent falling below $25 per barrel.

With the current relationship between Brent and bunker prices, which in some major ports recently including Rotterdam has been priced at around 50 percent of crude, bunker buyers could realistically expect to see double digit bunker prices on their quotes once Brent breaks the $26.50 a barrel mark - a 12.7 percent decline from today's low.

On Monday Brent closed 15.2 percent lower week-on-week.

Ship & Bunker News Team
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