Expert says bunker prices set to rise, with mixed shifts next week

We may see mixed shifts in bunker fuel prices next week with the upward momentum to take a break, but crude stockpiles drop and situation in Egypt could continue to push the products prices even higher, the MABUX data shows. The bunker review  was contributed to IAA PortNews by the market specialist Marine Bunker Exchange.
West Texas Intermediate crude rose from the highest level in 15 months on Wednesday after U.S. stockpiles fell for a second week. Brent’s premium to WTI shrank to $1.99 the narrowest since November 2010. WTI climbed as much as 0.9 percent after gaining 2.9 percent yesterday, the most in two months.
Crude inventories dropped by 9.87 million barrels last week, according to Energy Information Administration data on Wednesday. That’s more than three times a median decline of 3.2 million forecast in a Bloomberg News survey. - Demand for oil is clearly on the rise, particularly as the U.S. economy recovers, but tensions in the Middle East are always a potential driver of higher prices, but the narrowing of the gap between Brent and WTI suggests that it’s actually the demand side that pushes the price higher.
Brent Premium: Brent for August settlement rose as much as 42 cents, or 0.4 percent, to $108.93 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $1.83 to WTI. The spread was $1.99 Wednesday, the narrowest based on closing prices since Nov. 30, 2010.
WTI’s discount to North Sea Brent has shrunk from as much as $23.18 a barrel on Feb. 8 as the U.S. reduced distribution bottlenecks that had boosted inventories. Crude stockpiles at Cushing, Oklahoma, the delivery point for New York futures and the nation’s largest oil-storage hub, fell 2.7 million barrels in the week ended July 5, according to the EIA, the Energy Department’s statistical arm. That’s the biggest drop since September 2009.
We are finally seeing oil demand catch up with the economic recovery in the U.S., and elsewhere which is putting upward momentum on oil prices.
Source: PortNews