World News
"Pessimistic" Beijing Causes Crude Prices To Drop Again
The guarded optimism over warming U.S./China relations that informed most of last week's crude trading sessions seemed to vanish on Monday just as suddenly as they had arrived, due to an unnamed Chinese government source telling media that the mood in Beijing about a trade deal was pessimistic.
Based on this entirely sentimental view, traders on Monday caused Brent to settle at $62.44 per barrel, down 86 cents, and West Texas Intermediate to end 67 cents lower at $57.05 per barrel.
Beijing's reported dismal mood was due to U.S. president Donald Trump's reluctance to roll back on tariffs; plus, expectations of lower seasonal demand for gasoline in the U.S. also negatively affected crude prices.
Despite the schizophrenic nature of crude trading of late, it's worth pointing out that on Monday Chinese state media Xinhua reported that Beijing and Washington had "constructive talks" on trade in a high-level call over the weekend, although it gave few other details.
As for the actual mechanics of the crude market, John Kemp, commodities analyst at Reuters, noted on Monday that hedge funds in the most recent week reduced existing bearish short positions by 31 million barrels while adding 10 million barrels of new long positions in the six major petroleum futures and options contracts.
Kemp remarked, "From a fundamental perspective, the balance of price risks looks skewed towards the upside, with the potential for oil consumption to surprise on the upside next year while production growth could disappoint."
He added, "With so much uncertainty around the global economy and the prospects for a trade truce between the United States and China, few hedge fund managers want to bet heavily on a big rally in prices yet."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 641.00 | 4.00 | 762.00 | 5.50 |
| Rotterdam | 599.00 | 1.00 | 751.00 | 0.50 |
| Houston | 629.50 | 2.00 | 802.50 | 6.50 |
| Fujairah | 647.50 | 2.00 | 883.50 | 5.50 |
| Global 20 Ports Average | 661.50 | 3.50 | 859.00 | 5.00 |
| Global 4 Ports Average | 629.50 | 1.00 | 799.50 | 1.50 |
| Global Average Bunker Price | 719.00 | 3.50 | 915.00 | 7.50 |
Popular Now More
-
Apr 23The ship had come to Singapore from St Petersburg. -
Apr 22The 46,000 DWT MR2 chemical tanker Green Land was arrested at about 3:30 PM on April 17. -
Apr 22Iranian fuel oil has been widely reported to have been resold in the bunker markets of ports in the region for years, as well as being exported further afield.