Tue 16 Jan 2018 09:07

Brent tested $70 several times and closed at highest level in three years


By A/S Global Risk Management.



Brent oil price tested $70 several times yesterday and closed above - the highest close in more than three years. At the time of writing, Brent price is just below $70.

Several OPEC members and non-OPEC member Russia have over the past days repeated that the current oil production cut deal will remain throughout 2018 despite the current elevated oil price levels. Target of the production cut deal is to bring down global crude oil inventories to five-year average and stabilise prices.

Meanwhile, all eyes are on U.S. shale oil production. The current oil price level seems highly attractive for shale oil producers and last week's oil rig count showed an increase in the number of active rigs of 10. Further, market drums speak of shale oil producers having hedged a large portion of their flow out until 2020 - meaning they would be able to keep pumping even during a drop in prices without losing money. Shale oil wells - compared to conventional wells - are relatively easily opened and closed by producers as prices and conditions change. Unlike conventional wells, shale oil wells deplete at a rapid pace and the average lifespan of a shale oil well is around 3 years. So drillers need to open new wells in order to keep production flowing.

Note: due to yesterday's holiday in the U.S., the inventory reports are a day delayed and oil stocks data from the American Petroleum Institute will therefore be published tomorrow evening instead of tonight. The same goes for the EIA oil inventory report, which is published Thursday afternoon.

Turning to economic data, today sees UK CPI and PPI (inflation data). Tomorrow, Eurozone inflation is published.


The Buffalo 404 barge, owned by Buffalo Marine Service Inc., performing a bunker delivery. TFG Marine installs first ISO-certified mass flow meter on US Gulf bunker barge  

Installation marks expansion of company's digitalisation programme across global fleet.

Sogestran's fuel supply vessel, the Anatife, at the port of Belle-Île-en-Mer. Sogestran's HVO-powered tanker achieves 78% CO2 reduction on French island fuel runs  

Small tanker Anatife saves fuel while supplying Belle-Île and Île d'Yeu.

Crowley 1,400 TEU LNG-powered containership, Tiscapa. Crowley deploys LNG-powered boxship Tiscapa for Caribbean and Central American routes  

Vessel is the third in company's Avance Class fleet to enter service.

The inland LNG bunker vessel LNG London. LNG London completes 1,000 bunkering operations in Rotterdam and Antwerp  

Delivery vessel reaches milestone after five years of operations across ARA hub.

The M.V. COSCO Shipping Yangpu, China's first methanol dual-fuel containership. COSCO vessel completes maiden green methanol bunkering at Yangpu  

China's first methanol dual-fuel containership refuels with green methanol derived from urban waste.

Carsten Ladekjær, CEO of Glander International Bunkering. Glander International Bunkering reports stable performance amid regulatory changes  

Bunker trader achieves $3bn turnover and $22m pre-tax earnings for fiscal 2024-25.

Map of the Mediterranean Sea ULSFO demand surges in Med as ECA compliance drives fuel shift  

KPI OceanConnect reports accelerating ULSFO uptake across the region.

The Zale performing a bunker delivery. Monjasa reports Singapore as top bunker supply port with over 1 MMT delivered  

Supplier says world's largest bunkering hub became its biggest supply location in 2024.

Steel cutting ceremony for the 7,999 DWT chemical bunker tanker Lucia Cosulich at Taizhou Maple Leaf Shipbuilding Co., Ltd. in China. Fratelli Cosulich begins construction of second methanol-ready bunker tanker  

Italian firm starts steel cutting for 7,999 DWT chemical bunker vessel.

Petrobras logo. Petrobras introduces volume-based price discounts at Santos  

Brazilian oil company offers progressive discounts for bunker deliveries exceeding 1,500 tonnes.


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