Wed 7 Oct 2015, 11:37 GMT

Fourth-quarter oil market report released


Report forecasts bullish oil prices during the fourth quarter of 2015.



Denmark-based A/S Global Risk Management has forecast bullish oil price levels during the third quarter of 2015.

In its latest report, entitled 'The Oil Market Quarterly Outlook Oct 15', Global Risk analyses how the lifting of sanctions against Iran could affect the supply/demand balance in the oil market, and the impact of a postponement of an interest rate hike in the U.S.

The firm explains: "Since our last Quarterly Outlook in July, oil prices have dropped on global supply glut and mediocre economic growth outlook around the globe.

"Oil supply grows faster than oil demand at the moment - with OPEC and Russia production at record-levels and U.S. shale oil production keeping up pace being main reasons for the excess global oil supply.

"On the financial front, the traditional growth engine China seems to be slowing down pace and this spills over to the rest of the world; e.g. the U.S. where the central bank refrained from raising interest rates with comments to global economic headwinds. Now the guessing game is on as regards the timing of a potential interest rate hike in the U.S.

"The upcoming lifting of sanctions on Iran is one of the hottest topics oil-market-wise as this could add additional oil to an already well-supplied oil market. Potentially, up to 600,000 barrels per day could come online in 2016, should sanctions be lifted within the coming 4-6 months."

The Global Oil Strength Index (GOSI)

The Global Oil Strength Index, or GOSI, was introduced by Global Risk in 2010. The GOSI is a single number between 0 and 100 that signals Global Risk Management's expectations for the development of oil prices. A reading below 50 indicates a declining trend and above 50 an increasing trend.

Global Risk calculates the GOSI by assigning a strength rating or index for each of three factors (Fundamentals, Financials and Geopoliticals) and then calculating a weighted average based on the three strength ratings.

Fundamentals - covering the supply and demand balance.

Financials - covering speculators' interest and the development of the financial market.

Geopolitics - covering the situation in unstable oil-producing regions of the world.

Fundamentals: Oct 2015 - Rating: 52 (vs 45 in its July 2015 forecast).

In the report, Global Risk said: "Oil supply is plenty at the moment; we could see Iran exports increase as sanctions are lifted - on the other hand, countries like Libya and potentially Iraq could experience set-backs in production due to unrest. Also the number of active drilling rigs in the U.S. seems to be on the way down for now. So we set fundamentals to slightly bullish."

Financials: Oct 2015 - Rating: 51 (vs 45 in its July 2015 forecast).

Global Risk said: "The financial situation in China dominates the economic market sentiment at the moment - could spill over to the rest of the world in the short term. The postponement of an interest rate hike in the U.S. seems bullish for oil prices."

Geopolitics: Oct 2015 - Rating: 50 (vs 50 in its July 2015 forecast).

Global Risk said: "For now, the geopolitical risk premium is neutral for oil prices."

GOSI - Rating: Oct 2015 - Rating: 51 (vs 47 in its July 2015 forecast) - The GOSI is above 50, indicating that Global Risk's oil price expectation is bullish.

Average price forecasts:

Brent Crude (US$ per barrel)

Q3 2015 - 48
Q4 2015 - 51
Q1 2016 - 53
Q2 2016 - 52

3.5% Rotterdam Barges (US$ per tonne)

Q3 2015 - 214
Q4 2015 - 235
Q1 2016 - 248
Q2 2016 - 244

0.1% CIF NWE Cargoes (US$ per tonne)

Q3 2015 - 460
Q4 2015 - 481
Q1 2016 - 492
Q2 2016 - 484

380cst Singapore Cargoes (US$ per tonne)

Q3 2015 - 236
Q4 2015 - 254
Q1 2016 - 270
Q2 2016 - 264

0.5% Singapore Gasoil (US$ per tonne)

Q3 2015 - 456
Q4 2015 - 484
Q1 2016 - 499
Q2 2016 - 495

3% US Gulf Waterborne (US$ per tonne)

Q3 2015 - 230
Q4 2015 - 251
Q1 2016 - 267
Q2 2016 - 260

N2 Heating Oil (US$ per tonne)

Q3 2015 - 452
Q4 2015 - 477
Q1 2016 - 495
Q2 2016 - 488


Sea Horizon vessel. Pinnacle Marine launches second B100-compatible harbour craft for Les Star  

Sea Horizon joins Singapore’s harbour craft fleet.

Ocean Breeze vessel. Sallaum Lines orders LNG-fuelled, ammonia-ready PCTCs from Chinese yards  

Operator signs shipbuilding agreements for new generation of 8,600-CEU vessels, taking its newbuild investment past $1bn.

Energy North vessel. Nakilat takes delivery of dual-fuel carrier in South Korea  

Ammonia-ready design positions vessel to play key role in future low-carbon energy supply chains, says Qatari firm.

Acta Hercules naming ceremony. Acta Marine christens methanol dual-fuel vessel Acta Hercules in IJmuiden  

Dutch operator marks the christening of its second newbuild CSOV.

Maran Melina vessel. Angelicoussis Group takes delivery of fifth dual-fuel Suezmax tanker  

Maran Tankers Management adds the 155,500-DWT Maran Melina to its fleet.

CMA CGM Orsay naming ceremony. CMA CGM takes delivery of LNG-powered Orsay for Asia-Europe trade  

24,212-TEU vessel joins 10-ship series, adding capacity to the carrier's FAL3 route.

Titan Unikum vessel. Titan Clean Fuels completes 15-year survey on LNG bunkering vessel Titan Unikum  

Multi-gas carrier has undergone dry-docking work at a Chinese yard, preparing it for future upgrades.

Aesen 116H vessel. Lehmann Marine’s CUBE battery system debuts in China aboard hybrid crew boat  

German battery maker’s first Chinese installation targets fuel savings on a Cheoy Lee-built vessel for a Singapore operator.

Person signing a document. Iino Lines secures transition loan from Mizuho Bank for LPG dual-fuel VLGC  

Japanese shipowner finances the acquisition of Lumi Aurora through a green transition finance framework aligned with ICMA guidelines.

ABS, HD KSOE and Siemens MoU signing. ABS, HD KSOE and Siemens partner on digital twin technology for ammonia-fuelled ship safety  

Three firms will combine CFD analysis and digital twin technology to assess ammonia leak scenarios in vessel design.