World News
Russia: $50 Oil OK for the Long Term, and Nations Controlling 75% of Crude Exports Support Output Cap
Russian Energy Minister Alexander Novak says that countries representing about three quarters of the world's crude exports have publicly supported a deal that would see oil production capped.
"Those countries which have openly supported this approach are producing around 75 percent out of global (oil) export volumes. My point is that, in practice, this is enough to agree," Novak was quoted as saying on Saturday.
As Ship & Bunker previously reported, Saudi Arabia, Russia, Venezuela, and Qatar last Tuesday agreed to freeze their output at January levels in a bid to stop the global oil price slide, but only if other oil-producing countries follow suit.
Moreover, Novak is reported to have said that after discussions "with colleagues," it was concluded that an oil price of $50 per barrel would be adequate for consumers and exporters in the long term, although he did not elaborate further.
"We've worked out a common position," said Novak, noting that consultations between the countries should wrap up by March 1.
"We discussed various options, including doing nothing, and cutting production," he added.
The comments will presumably be encouraging for bunker buyers, with $50 oil likely to result in IFO380 in the $250 to $300 per metric tonne (pmt) range - significantly less than the $600+ pmt they were paying as recently as mid 2014.
Meanwhile, Venezuela's President Nicolas Maduro on Friday announced that the country will be sending out new proposals to leaders of Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries in an effort to stabilise the oil market.
Maduro did not provide further details on the proposals or their contents.
As Ship & Bunker reported on Monday, it has been suggested that the output freeze pact will not be enough to save Venezuela's economy, which Business Insider writer Ben Moshinsky describes as being "on the brink of collapse."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 510.00 | 2.50 | 611.00 | 4.00 |
| Rotterdam | 477.00 | 1.00 | 618.50 | 4.00 |
| Houston | 469.50 | 0.50 | 610.00 | 2.00 |
| Fujairah | 501.50 | 1.50 | 708.50 | 3.50 |
| Global 20 Ports Average | 532.00 | 2.00 | 711.50 | 0.00 |
| Global 4 Ports Average | 489.50 | 0.50 | 637.00 | 0.50 |
| Global Average Bunker Price | 571.00 | 1.00 | 759.00 | 0.50 |
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