Paul Horsnell News

Oil investors are finally buying into the notion that the biggest risk to the price now is likely to be supply falling short of demand, rather than from any stubborn overhang of unwanted crude, the options market shows. The price of Brent crude has hit $52 a barrel, virtually double January's near-13-year lows, driven primarily by a decline in global production that has been speedy enough to bring supply and demand into line faster than many had anticipated. "In the end, you will see global oversupply, at some point diminish, and in effect even earlier than speculators realise," ABN Amro chief energy strategist Hans van Cleef said. In the last year, nearly a million barrels per day (bpd) have vanished from higher-cost U.S.

The U.S. will become more dependent on tanker-borne petroleum imports in coming years, coinciding with a ship shortage which will push freight costs sharply higher, energy and tanker analysts said on Wednesday. "Products imports are playing a bigger swing role in the U.S. than ever before," Paul Horsnell of Oxford Institute of Energy Studies said. "They're becoming a structural feature of the U.S. Horsnell told members of the tanker owners' organization Intertanko, which met in Sydney this week, that each year was now expected to bring a fourth quarter surge in demand for fuel oil imports -- a trade usually served by Panamax 50,000 tonrs. U.S. demand for gasoline imports would surge each spring. Intertanko research head Erik Ranheim said U.S.

A crucial Caribbean tanker fleet re-entered the market this week, having been held back for over a month because of a dispute between its owner, Pegasus Shipping, and junk-bond creditors in New York. U.S. brokers said the fleet's return would add surplus tonnage to a market that is already cooling, and would put further downward pressure on freight rates. Fuel oil freight stood at around $1.65 per barrel for 50,000 ton upcoast cargoes on Friday (April 27), compared to about $1.90 per barrel in mid-March, brokers said. Pegasus said the two time-charters and five spot fixtures so far completed were all done at market rate. Chairman Nicos Peraticos has resumed negotiations with bondholders and hopes to complete a buy-back of the $150 million Pegasus debt in June, a spokesman in London said.