World News
Oil Dips As Analysts Debate Impact Of OPEC Production Delay
The Organization of the Petroleum Exporting Countries' (OPEC) long-expected decision to delay a planned output increase by three months until next April did little to buoy oil traders on Thursday: two key benchmarks dipped, albeit minimally.
Brent settled down 22 cents at $72.09 per barrel, while West Texas Intermediate settled down 24 cents at $68.30 per barrel.
Reuters calculated that the unwinding of 2.2 million barrels per day (bpd) of cuts will start from next April and increase monthly by 138,000 bpd, lasting 18 months until September 2026.
Rystad Energy stated that OPEC's decision "will likely prevent any price downsides in the short term," so it fell upon Bob Yawger, director of energy futures at Mizuho, to theorize why prices dipped following the cartel's announcement: "The market is facing a surplus, there is no shortage of oil and there is not really any flashing sign of what to look forward to in the future to rally prices."
Amrita Sen, founder of Energy Aspects, further elaborated that the OPEC decision was bullish because it removed the bulk of oversupply for next year, "But the market believes [U.S. president-elect Donald] Trump wants low oil prices and hence remains bearish despite the OPEC+ announcement."
David Oxley, chief climate and commodities economist at Capital Economics, wrote in a note that although the decision "buys the group some time," weak global demand "means that it could easily find itself back in a similar position in three months' time.
"In our view, the fundamentals for oil prices remain weak, and the risks to prices are skewed to the downside."
Ole Hansen, head of commodities strategy at Saxo Bank, concluded, "OPEC+ is most certainly still in the 'protect price' mode…..hopefully by March they and us will be wiser regarding the impact of Trump's policies and China's potential stimulus response and also whether Iran's output has suffered from additional sanctions."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 539.00 | 4.00 | 664.50 | 6.00 |
| Rotterdam | 501.00 | 0.50 | 641.50 | 2.50 |
| Houston | 543.50 | 3.50 | 662.50 | 1.50 |
| Fujairah | 535.50 | 3.50 | 744.50 | 1.50 |
| Global 20 Ports Average | 571.00 | 1.00 | 746.50 | 0.00 |
| Global 4 Ports Average | 529.50 | 2.50 | 678.00 | 2.50 |
| Global Average Bunker Price | 621.50 | 1.00 | 801.50 | 1.00 |
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