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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Once again US crude production reaches three-decade output high

By A/S Global Risk Management.



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


Updated on 14 Dec 2017 08:54 GMT

Last week, US production rose by 0.77 mbpd. An increase this large is not common and even more remarkable is the current high production level. The increase indicates that if US drillers are willing to invest, the US fields hold huge production potential. In opposition to US crude production, the US crude inventories last week decreased heavily by 5.1 mbbl even as exports fell a little less than 300 kbpd. Likely part of the huge drop is because of US refiners preparing their gasoline inventories for next year, as the huge increase of 5.7 mbbl suggests. Partly because of strong global demand.

Looking to OPEC, the organisation increased the forecast from non-OPEC supply by 300 kbpd next year, likely as a reaction to the increased US production figures. Despite the extended estimate OPEC is still confident that the supply-cut agreement will lead to success by the end of next year. If the supply-cut is effective through H1 2018, it will be interesting to see what is on the agenda for the next official OPEC meeting in mid-2018.

In the north-western Europe, the Forties pipeline is still closed and latest news suggests that it will take 2-4 weeks before it will reopen. This event likely drove prices above 65 USD earlier this week, but now it seems as the market is over the immediate chock, though bearing in mind that this pipeline is crucial for the oil that is pricing Brent. Currently the Brent price is again below 63, with potential to increase to 64 or hit 62 during today.



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.






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Brent nearly hit upper sixties before retreating to $64
A/S Global Risk Management Ltd.

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