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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
Home » News

Brent in the mid-$80s as risk of supply disruptions takes centre stage

By A/S Global Risk Management.

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

Updated on 10 Oct 2018 11:35 GMT

Brent oil price remains in the mid-eighties as risk of supply disruptions take centre stage.

Hurricane Michael is currently sweeping over the Gulf of Mexico and heading for Florida, closing nearly 40% of Gulf of Mexico oil output, and workers are being evacuated from offshore platforms. Also, onshore oil terminals are shut, the largest one in Louisiana with a capacity of 2 mio. barrels has halted operations and around 670,000 barrels of oil production is currently said to have halted due to Michael.

News of the continued drop in Iranian exports this month also supports oil prices. Iranian crude exports were reported to be around 1.1 mio. barrels per day versus 2.5 mio. barrels per day back in April - a month before the U.S. announcement to reimpose sanctions against the country. The sanctions take effect on November 4, but buyers already seem to be finding alternative sellers.

Yesterday, the International Energy Agency, IEA, stated that oil markets "are entering the red zone" and that "expensive energy is back at a bad time, when the global economy is losing momentum; we really need more oil". The IEA appealed to OPEC and other oil producers to boost output.

Tomorrow, OPEC will publish its monthly oil market report, which could cause some intraday volatility. The weekly U.S. oil stocks reports from the API and EIA are released a day delayed due to Monday's U.S. holiday, i.e. the API report is published tonight while the EIA report is released tomorrow at 17.00 CET. Consensus is a build in crude, draws in distillates and gasoline inventories. Last week, crude oil inventories rose by almost 8 mio. barrels.

Turning to the economic data, today sees UK GDP and Manufacturing Production and U.S. inflation (PPI). The International Monetary Fund - IMF - lowered its global growth forecast for 2018 and 2019.

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.

Related Links:

US mulls waivers on Iran oil sanctions... but not permanently
A/S Global Risk Management Ltd.

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