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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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The bullish incitement seems to have worn off for now

09 Nov 2017 09:32 GMT

By A/S Global Risk Management.



Though Brent remains in the sixties and fundamentals most likely still strong, less bullish news has appeared than we have seen during the last couple of weeks, and bearish news has emerged.

For the last two weeks, the U.S. crude production has increased rapidly, and last week the production level was reported at 9,62 mbpd which is the highest in three decades. The high production level comes in a period where the U.S. rig count has been steadily decreasing. This points to a huge potential in the US shale drilling rigs, and, in general, in U.S. shale oil production.

The Energy Information Administration (EIA) released the weekly inventory report yesterday, showing a build in crude of 2.24 mbbl, a draw in distillates of 3.36 mbbl and a draw in gasoline of 3.31 mbbl. So quite high draws in the products.

The build in crude stocks is likely a consequence of the very high crude production and exports of crude tumbling from about 2 mbpd to about 0,87 mbpd.

In China, the import of crude for October fell to about 31 million tonnes down from about 37 million tonnes in September, likely explaining some of the decrease in U.S. exports. Though this imports level is the lowest this year, it is important to note that imports decreasing in the month of October is not unusual for China. Looking all the way back to 2013, Chinese imports numbers have decreased from September to October, and this October the import level is still higher than previous years. Concluding that Chinese demand is still strong and in an uptrend. To accommodate this uptrend China has announced that the country has raised import quotas for non-state firms by 1,1 mbpd in 2018.



A/S Global Risk Management is a provider of customised hedging solutions for the management of price risk on fuel expenses. The company has offices in Denmark and Singapore. For further details about its risk management products and services, please call +45 88 38 00 00 or email hedging@global-riskmanagement.com.


Image: Michael Poulson, Oil Risk Manager at A/S Global Risk Management. Image credit: A/S Global Risk Management




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