This is a legacy page. Please click here to view the latest version.
Tue 13 Nov 2018, 09:29 GMT

Oil trading below $70 after highly volatile start to week


By A/S Global Risk Management.


Michael Poulson, Senior Oil Risk Manager at Global Risk Management.
Image credit: A/S Global Risk Management
Yesterday, Brent crude traded in a range between $71.88 and $68.87 - a 3-dollar range. The close was at $70.12 but opened a dollar lower this morning.

A bearish sentiment comes as the three largest oil producers, Russia, the US and Saudi Arabia, have increased production quite a bit as a means to compensate for the expected loss of Iranian supply from the beginning of this month. The market expected around a million barrels per day to be cut from Iran, but as waivers were granted to a row of oil importers, "only" 500-600 kbpd is actually off the market. The Saudi energy minister Khalid Al-Fahli on Sunday stated that Saudi Arabia would cut supply by 500 kbpd from December. The 500 kbpd is likely going to be the main topic of the agenda on the next OPEC meeting in start December as Saudi Arabia allegedly is not certain whether other producers would agree to curb output. Furthermore, U.S. president is urging Saudi Arabia and OPEC to avoid curbing output as he once again yesterday tweeted that Saudi Arabia and OPEC hopefully would not cut oil production.

In addition to at-the-moment bearish fundamentals, financials in terms of the US dollar strength is a bearish force as well. The index is at the highest point since mid-2017. The dollar index is known for being negatively correlated with commodities, hence oil prices meaning that when the index is high, oil is low. The dollar index is therefore likely to weigh on the Brent crude price.

Due to yesterday's U.S. holiday, the weekly oil inventory data from API and EIA is one day delayed to Wednesday and Thursday respectively.

BP  

Vard 4 39 design render. Dong Fang Offshore orders CSOV with battery-hybrid propulsion  

Vard secures fifth newbuild contract from Taiwanese firm, with delivery scheduled for 2028.

Molgas Energy logo. Spain sets out regulatory roadmap for biomethane and bio-LNG growth  

Molgas outlines Spain’s biogas targets, certification rules and adoption barriers across transport, maritime and grid injection.

Rock Star vessel. CSL and OWL launch first subsea rock installation vessel for offshore wind  

MV Rock Star can run on MGO and methanol and is designed to support scour protection and cable burial for offshore wind projects.

François Michel and Andy McKeran. Lloyd’s Register study backs 200,000-cbm LNG carriers for fleet renewal  

Analysis finds larger LNG carriers could cut transport costs while retaining access to most major terminals.

Rendering of Van Oord's vessels Vindnes and Vestnes. Van Oord names new fallpipe vessels with multi-fuel engines  

Dutch marine contractor unveils two purpose-built subsea rock installation vessels due for delivery in 2028 and 2029.

Hoegh Autoliners and CMG contract signing. Höegh Autoliners signs contract for six dual-fuel LNG vessels  

Aurora Class ships are designed to be converted to run on alternative fuels in the future.

IMO Strengthening seafarers competence for alternative fuels and new technologies event. IMO and EMSA gather maritime experts to address seafarer training for alternative fuels  

Experts examine how training frameworks must evolve as shipping adopts ammonia, methanol, hydrogen and other new technologies.

Shore power illustration. Portsmouth port publishes white paper on UK’s first multi-berth shore power system  

UK port shares lessons from five-year project in bid to spur nationwide uptake of the technology.

IMO Technical Seminar on the use of ammonia as marine fuel. IMO seminar examines technical hurdles facing ammonia as a marine fuel  

Technical seminar under the Future Fuels and Technology Project attracts over 800 participants.

Wind-assisted vessel illustration. ICS to host webinar on wind-assisted propulsion for shipping  

Event to bring together panel of industry experts to discuss wind propulsion as a decarbonisation option.


↑  Back to Top