• 2018 February 8 17:14

    Bunker prices may continue downward evolution next week

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil prices fell back suddenly over the last few trading sessions. First, a rebound for the dollar led to a steep decline in indexes on Feb.01. Then, sudden turmoil in the broader financial system increased sharply the volatility in the stock market, causing the biggest single-day upheaval in years. One of the main industrial indexes, the Dow Jones Industrial Average fell more than 600 points, only the ninth time in history that a fall of that magnitude has occurred. High OPEC compliance and falling Venezuelan production more or less offset surging output from U.S. shale and an uptick in inventories in the meantime.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) demonstrated a steep decline in the period of Feb.01 - Feb.08:
        
    380 HSFO - down from 375.36 to 359,57 USD/MT  (-15.79)
    180 HSFO - down from 413,36 to 396,93 USD/MT  (-16.46)
    MGO         - down from 643.07 to 614,29  USD/MT  (-28.78)


    Hedge funds have cut their bullish exposure to petroleum for the first time in six weeks as oil prices stalled and sentiment turned more cautious amid concerns about an increasingly crowded trade. At the moment, there is not enough data to determine whether the position reduction was merely a pause after an extraordinary bull market or the start of a more sustained pull back.

    Goldman Sachs in turn predicts that the oil market has likely balanced, and that Brent Crude will reach $82.50 a barrel within six months. Bank sees the price of Brent reaching $75 per barrel within three months, lifting its short-term oil price projection from the previous $62 forecast. As per Goldman, the rebalancing of the oil market has likely been achieved, six months sooner than it was expected. The Bank considers, that the decline in excess inventories was fast-forwarded in late 2017 by stellar demand growth, high OPEC compliance, heavy maintenance as well as collapsing Venezuela production.

    Production by the Organization of the Petroleum Exporting Countries (OPEC) rose in January from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in Venezuela and strong compliance with a supply reduction pact. OPEC produced 32.4 million barrels per day (bpd) in January, up 100,000 bpd from December. Last month's total was revised down by 110,000 bpd to the lowest since April 2017. Even so, adherence by producers included in the deal to curb supply rose to 138 percent from 137 percent in December, suggesting commitment is not wavering even as oil prices hit their highest level since 2014.

    While the production cut pact has been a success, there has been growing speculation that the higher oil prices could unravel the deal, because OPEC and/or Russia could either start cheating or see rising U.S. supply as a threat to prices and market share.

    Compliance at OPEC was mostly boosted by the involuntary decline of production in Venezuela. Barclays estimates that Venezuela's production could fall by 700,000 bpd this year, averaging 1.43 million bpd. The crisis continues to erode the country's production base, a drop off that accelerated at the end of 2017. The reasons for the decline are an economic crisis that is only worsening, no cash for investment or even maintenance, a debt crisis, U.S. sanctions, the politicization of PDVSA and a brain drain from the company. Meanwhile, U.S. seemed to offer some measures of support for a military coup in the country. U.S. Secretary of State Rex Tillerson said recently that there will be a change in Venezuela while Maduro could choose to just leave, that would be the easiest.

    As for Russia, Moscow is likely to keep its compliance rate close to 100 percent in 2018. However, it is not excluded, that Russian oil companies may become increasingly nervous about the deal preventing them from ramping up production. One of the scenarios could be that Russian oil firms may consider that the production pact is nearing its end and will ramp up drilling if oil prices continue to be well above $60 and the global stockpiles continue to drop.

    Besides, in November 2017, Russian national pipeline monopoly Transneft said that the sulfur content of Urals oil exports to Europe would reach a critical level in 2017 and continue to rise in 2018 as more low-sulfur crude oil is shipped to China. The company had no technological capacity to continue reducing the sulfur level of Urals crude for European buyers. European refiners are left with lower-quality imports from Russia and are now reviewing how much Russian crude they would buy and at what price: the factor which may change sentiments in global fuel market in a near-term outlook. As the first sign, Saudi Arabia over the weekend said it had cut the official selling prices for its crude to European customers.

    The number of oil drilling rigs in the U.S. climbed for a second week in a row. It rose by 6 to 765 last week, implying that further gains in domestic production are ahead. Besides, the data showed that U.S. crude stockpiles rose 1.9 million barrels last week, which marked the second increase in 12 weeks. The report also showed that U.S. crude oil production, driven by shale extraction, hit 10.25 million barrels per day, the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia. Increasing drilling activity for new production means output is expected to grow further.

    China surpassed the U.S. in annual gross crude oil imports in 2017. It imported on average 8.4 million bpd in 2017, compared with 7.9 million bpd of imports for the United States. In total petroleum and other liquid fuels imports, China had become the top global net importer back in 2013. The continuous rise in Chinese oil imports is due to several factors: declining domestic production, growing oil and liquid fuels consumption, a build-up in strategic reserves, refinery sector reform which allows independent refiners to import quotas of crude oil, and increasing refinery capacity and utilization. Last year Russia was China's top oil supplier for a second year running, with Russian crude oil sales up 14 percent and beating OPEC's leader and largest exporter Saudi Arabia for a second consecutive year. Growing Chinese market is still one of the main supportive factors to global fuel indexes.

    There are still signs that the global fuel market is tightening and it is expected that the process will continue in the second half of this year. However, forecasted increase in U.S. crude inventories over the next few weeks and months may change sentiments drastically. Traders may interpret rising U.S. oil production and inventory builds as a sign that the market tightening has slowed with a possibility of downside risk.  We expect bunker prices may continue downward evolution next week while the volatility increases.



     

     

     

     

     

     

     

    * MGO LS
    All prices stated in USD / Mton
    All time high Brent = $147.50 (July 11, 2008)
    All time high Light crude (WTI) = $147.27 (July 11, 2008)




2018 August 17

20:03 A system of floating containment booms installed near two jetties of Petersburg Oil Terminal
18:26 Krasnoye Sormovo Shipyard launches Pola Feodosia, forth of RSD59 dry cargo vessel series
17:54 Primorsk Oil Terminal’s throughput in Jan-Jul falls 12% to 31.38 million tonnes
17:51 Nevsky Shipyard continues testing of unique replenishment system
17:08 Marine Robotics: Laws, Applications, Technologies roundtable registration underway in Moscow and Vladivostok
17:03 Port of Vysotsk volume in Jan-Jul down to 10.45 million tonnes
16:27 Port of Ust-Luga throughput in Jan-Jul down 4% to 56.27 million tonnes (details)
16:04 Western Bulk publishes First half 2018 results
15:53 Port of St. Petersburg seven-month volumes grow 13% to 34.39 million tonnes (details)
15:34 Stena Blue Sky delivers the first LNG cargo at energy giant ENN's new terminal in China
15:03 ANL announces FAK rates from North Europe and Mediterranean to Australia
14:33 A.P. Møller - Mærsk A/S delivers revenue growth in the second quarter of 2018
14:03 Third railway track put into operation in Port Bronka
13:58 Nevsky Shipyard wins contract for Arc4 passenger/freight vessel duo to be deployed on Sakhalin-Kurils route
13:51 Samsung Heavy Industries wins two eco-friendly LNG carriers
13:21 TORM posts H1 2018 interim results
13:04 A.P. Møller - Mærsk A/S to pursue a separate listing of Maersk Drilling
12:30 Hapag-Lloyd invests in growing East African market
12:07 Port of Oakland gives $70,000 to develop eco-jobs workforce
11:07 Hapag-Lloyd announces rates for Far East Westbound East Asia (including Japan) to North Europe and Mediterranean
10:45 Crude oil futures price edges down to $71.38 in London, in New York to $65.44
10:07 Latest Sanmar tugboat under trials
10:02 Gazprom Neft 1H 2018 net profit soars 1.5-fold
09:41 Baltic Dry Index adds 2 pts to 1727 points
09:37 Diana Shipping announces time charter contract for m/v Coronis
09:32 Port of St. Petersburg bunker prices close the week on a down note
09:06 Gulftainer invests AED11 mln in road extension
08:27 CMA CGM implements new FAK rates from North Europe and Mediterranean to Australia

2018 August 16

18:45 Kalashnikov Concern’s Vympel Shipyard lays keel for freezer trawler of Project T30
18:06 Port of Dover awarded contract to Solent Marine Ltd to design and fit-out Dover's new marina
17:32 Maersk Line announces rates from Far East Asia to West Africa
17:06 Hapag-Lloyd increases reefer fleet by 11,100 containers
16:56 DFDS orders additional freight ferry (ro-ro) newbuilding from the Chinese Jinling Shipyard
16:52 Sovcomflot’s shuttle tanker Governor Farkhutdinov ships 600th crude oil cargo for Sakhalin-2
16:03 CMA CGM announces GRR from Asia to Mozambique
15:47 Taganrog Sea Commercial Port's H1 2018 employee benefits and rewards programme totals RUB 2.2 million
15:31 Melbourne port operator ICTSI may be investigated by State and Federal authorities
15:09 Bunker prices at Far Eastern ports remain flat
14:33 CMA CGM announces GRR from Asia to Indian Ocean
14:27 MABUX: Bunker prices may change irregular next week
14:13 Maersk Line announces rates from Far East to North Europe
13:42 First ever S-T-S loading of 70000dwt Panamax coal carrier performed at Shakhtersk harbour transshipment location in Sakhalin
13:32 More investment contracts at the Port of Gdansk
13:02 Wärtsilä equipped Canadian ferry will have minimal environmental impact
12:16 Damen Shipyards Galati celebrates 125 years
12:09 Okskaya Sudoverf Shipyard launches 6th serial barge of Project ROB20
12:03 Boskalis presents half-year results and terminates loss-making low-end transport activities
11:59 Port of Oakland container volume up 3.6 percent in July 2018
11:45 Rolls-Royce launches new battery system for ships
10:58 DP World revenue up 14.4% in H1 2018
10:57 VARD secures contract for one autonomous and electric-driven container vessel for YARA
09:39 EU NAVFOR mission operation commander visits Spanish MPRA in Djibouti
09:21 Baltic Dry Index gains to 1725 points

2018 August 15

18:33 Equinor extends partnership with The Arctic Race of Norway
17:56 Port Kavkaz seven-month volumes soar 30% Y/Y to 25.21 million tonnes
17:36 Russian Gov't to allocate RUB 500 million in subsidies to support small-tonnage fishing ships construction, Rosrybolovstvo says
17:34 Maersk Line to rise rates from Far East to East Coast South America
17:30 Yang Ming orders ten 2,800 TEU containerships
17:19 Nor-Shipping 2019 takes place in Oslo and Lillestrøm, Norway, from 04 to 07 June 2019
16:05 New Times Shipbuilding announces delivery of oil tanker