• 2018 March 8 16:03

    MABUX: Bunker prices may continue irregular changes next week while volatility remains

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes started this week with a slight upward movement supported by news that Libya's largest oil field was temporarily idled, as well as forecasts that U.S. crude inventories may have posted a surprise decline last week. However, oil vectors changed direction for downtrend after EIA reported another build of United States crude oil inventories and after a key advocate for free trade in the U.S. government resigned, feeding concern that Washington will go ahead with import tariffs and risk a trade war.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) demonstrated insignificant irregular changes in the period of Mar.01 - Mar.08:
    380 HSFO - up from 352.64 to 353,14 USD/MT     (+0.50)
    180 HSFO - up from 389,79 to 393,14 USD/MT     (+3.35)
    MGO         - down from 606.93 to 604,07 USD/MT (-2.86)

    The International Energy Agency (IEA) on Mar.05 forecast the U.S. would become the world's top crude producer by 2023 with production hitting a record of 12.1 million barrels a day. This is around 2 million barrels a day higher than 2018 production. U.S. oil production has been rising due to the shale boom, helped by technological advances and improved efficiency.  The IEA also expected that oil production growth from the United States, Brazil, Canada and Norway would more than meet global oil demand growth through 2020, add-ing that more investment would be needed to boost output after that.

    Besides, with non-OPEC supply rising quickly, particularly in the U.S., OPEC may struggle to figure out a way to increase output without pushing down prices. That could put pressure on the cartel to keep the production cuts in place for longer than they had wanted.

    Meantime, the cartel has been discussing alternative ways of measuring global supply to replace the OECD stockpiles estimate, which OPEC considers does not give accurate evaluation of the inventories. Even so, IEA data shows that OPEC and its partners led by Russia have been overperforming: the overhang in OECD oil inventories has shrunk to just 52 mil-lion barrels from 264 million barrels a year ago.

    Crude production cuts from the United Arab Emirates caused OPEC's monthly output to fall to a 10-month low in February. The cartel produced 32.28 million barrels per day - netting a reduction of 70,000 barrels per day compared to the previous month. The February output figure amounts to the lowest since April 2017. Compliance to the November 2016 agreement to cut output by 1.2 million barrels per day rose to 149 percent this month, jump-ing five points from January.

    Besides, this week oil ministers from the OPEC and other global oil producers gathered in Houston for the annual CERAWeek Conference started on Mar.05. OPEC Secretary-General Mohammed Barkindo said there is a common understanding between the two sides. However, some OPEC members (Nigeria in particular) argued that cartel needs to begin to look at companies that are very active in shale industry and begin to get them to take some responsibilities in terms of stability of oil prices.

    Geopolitical instability also becomes problematic as the oil market tightens. At the moment geopolitical threats are still existing in various ways in the Middle East and North Africa. In places like Libya, Yemen and Syria there is a lack of legitimacy in government. As a result, Middle Eastern countries are increasing spending on security and defense, and the rising expenditures translate into higher revenue requirements. That means that a lot of key oil producers will need higher oil/fuel prices for their budgets to breakeven in a medium-term outlook.

    Conflict between the U.S. and Iran is potentially one of the top geopolitical risks to the oil mar-ket this year. If the U.S. implemented sanctions only targeting Iranian oil purchases, an initial year reduction could be up to 400,000-500,000 bpd. The drop off would be closer to 600,000 bpd if China, India or Turkey decided to cooperate with the U.S. on some level. However, the efficiency of the U.S. campaign could be significantly undercut if China or any other country decides to increase oil purchases from Iran as other buyers back out.

    The fuel indexes got some support from the news that crude oil production at Sharara, Libya's biggest oil field, was briefly suspended after the pipeline to the Zawiya terminal was blocked. The field resumed operation on Mar.05. Sharara pumps about 300,000 bpd, which is close to a third of Libya's total 1.1 million bpd production.

    The U.S. is going to impose sanctions on a Venezuelan oil services company while also restricting insurance for oil shipments from the South American country. The moves come as the Venezuelan President Nicolas Maduro is planning elections for April. How or when such measures are implemented is still unclear. In any case the effect on the fuel market would be rather significant. Venezuela's oil production is already expected to continue to decline -output is expected to average 1.43 million barrels per day (bpd) this year, down from 2.18 million bpd in 2017.

    The Trump administration announced new tariffs on steel and aluminium imports. The plan calls for 25 percent tariff on imported steel from all countries, plus a 10 percent tariff on aluminium. The announcement immediately sent the Dow Jones Industrial Average down more than 400 points. The tariffs on imported steel would affect a wide array of industries, from aerospace to auto manufacturing, chemicals, oil products and more. The costs may hit the U.S. in many ways: from the higher cost of steel and aluminium inputs into a wide array of products up to retaliatory measures from countries around the world.

    Besides, Trump also may hit at China, which has been one of his primary targets on trade since his presidential campaign. The Trump administration is considering restrictions of Chinese in-vestments in the U.S. and imposing tariffs on a broad range of its imports to punish Beijing for its alleged theft of intellectual property. In fact there is a real risk of trade wars at the moment.

    Meantime, exports of U.S. crude oil to Asia seem to decrease. Vessel-tracking and port data suggest Asian imports of U.S. crude were equivalent to about 560,000 barrels per day (bpd) in February, down sharply from 676,190 bpd in January. March's figure may be even weaker: only about 290,000 bpd.  The main reason for a slowdown in U.S. shipments to Asia is likely the narrowing discount of benchmark U.S. West Texas Intermediate (WTI) to Brent, the light crude grade used as a price marker for the rest of the world. Another factor undermining U.S. crude exports to Asia is the likelihood of plentiful cargoes from traditional suppliers in the Middle East and Africa.

    U.S. oil inventories had risen by 2.4 million barrels in the week to March 02. At 425.9 million barrels, U.S. crude oil inventories are in the lower half of the average range for this time of year, which should stimulate optimism despite a consistent growth in production in the shale patch and upcoming refinery maintenance season that will certainly affect inventories. Besides, U.S. energy firms added one oil rig last week, the fifth weekly increase in a row, bringing the total count up to 800, the highest since April 2011, pointing to more increases in output to come.

    The return of some geopolitical risks from the Middle East and Venezuela plus real threat of trade wars proclaimed by Trump administration may provoke possible ral-ly on global fuel market. However, we still expect bunker prices may continue irregular changes in the near-term.








    * 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 March 17

06:48 Seatrade convicted for trafficking toxic ships

2018 March 16

18:06 Rijkswaterstaat awards Afsluitdijk project to Levvel consortium
17:36 HHLA Container Terminal Burchardkai handles new record ship
17:05 ICS publishes latest Flag State Performance Table
16:51 Vladimir Putin inspected the completed new road section of the Crimean Bridge
16:35 Wison successfully delivers the global largest single cracking furnace module
16:20 GTT announces the end of the test phase of its new LNG brick® technology
16:05 Fincantieri starts building of ultra-luxury cruise ship for Regent Seven Seas Cruises
15:30 Caterpillar Marine announces first European IMO Tier III tugboat
15:03 Throughput of port Kavkaz up 67% to 4.3 million tonnes in 2M’18
14:39 Port of Hamburg proves effectiveness in handling mega-carriers
14:05 Training for port facility security staff arranged in the Dominican Republic
13:42 Multipurpose Reloading Complex takes lead in the industry
13:20 Karachi Shipyards & Engineering Works delivers two Damen Stan Patrol 1605 FRP patrol boats to Pakistan Customs
13:17 Bunker prices continue going down at the port of Novorossiysk, Russia (graph)
12:51 52 icebreaker escort operations performed in eastern part of Gulf of Finland during 24 hours on March 15-16
12:28 Seaports of Russia’s Azov Sea Basin handled 16.77 million tonnes of cargo in winter 2017-2018, up 63.8% Y-o-Y
12:04 Latin America maritime cooperation centre launched
11:40 Vympel Shipyard laid down second armament support ship of Project 20360М for RF Defence Ministry (photo)
11:15 Vostochny Port JSC develops railway infrastructure under its Phase 3 project (photo)
10:52 IMO joined leading oil spill experts to discuss future issues concerning oil spill preparedness, response and restoration
10:27 Brent Crude futures price down 0.11% to $65.05, Light Sweet Crude – down 0.05% to $61.16
10:09 Panama Canal signs agreement with Association of Soybean and Corn Producers of Mato Grosso
09:48 IMO is looking at safety aspects of on shore power supply to ships
09:34 Bunker prices are flat at the Port of Saint-Petersburg, Russia (graph)
09:16 Baltic Dry Index down to 1,150 points
09:03 Damen unveils Multi Cat Water Injection Dredger

2018 March 15

18:25 CMA CGM announces FAK rates from Asia to the Mediterranean
18:11 ICS releases latest Flag State Performance Table (with new criteria included)
18:05 Fincantieri will cooperate with Barzan Holdings
17:57 Throughput of port Kaliningrad in 2M’18 up 16% Y-o-Y to 2.32 million tonnes
17:35 Second Sanmar Voith Schneider Propeller tug joins sister in Israel
17:20 Throughput of port Vyborg up 19% to 197,800 tonnes in 2M’18
17:05 Seaspan acquires Greater China Intermodal Investments LLC
17:02 MABUX: global bunker market still in 'wait-and-see' mood
16:35 DP World announces strong financial results for 2017
16:16 Throughput of port Vysotsk down 5% to 3.06 million tonnes in 2M’18
16:05 ECSA and WSC call for the revision of the Reporting Formalities Directive to improve the efficiency of maritime transport
15:39 Port of Oakland imports up 14.9 percent in February 2018
15:31 Sanmar orders 42 Rolls-Royce thrusters
15:22 Coastal facilities and hydraulic engineering structures under FNPP project in Chukotka to be completed in August 2019
15:07 Port of Dover awards major contract for new Refrigerated Cargo Terminal
14:33 Yang Ming to launch new Japan-Malaysia-Vietnam direct service
14:11 Throughput of port Primorsk in 2M’18 down 32% Y-o-Y to 7.47 million tonnes
13:50 Throughput of port Ust-Luga up 6% to 16.59 million tonnes in 2M'18
13:25 VARD secures contract for the construction of one fishing vessel for Remøybuen AS
13:12 Throughput of Big Port St. Petersburg up 11% to 9.01 million tonnes in 2M’18
12:30 Paweł Jakubowski appointed as President of Polskie LNG S.A. Management Board
11:45 Freeport of Riga is getting ready for new cruise ship season
11:44 MOL announces delivery of the Beluga Ace, 1st next-generation FLEXIE series car carrier
11:23 34 icebreaker escort operations performed in eastern part of Gulf of Finland during 24 hours on March 14-15
11:00 Bunker prices are going up at the Far East ports of Russia (graph)
10:38 Marine Recruiting Agency and Corporate University “Norilsk Nickel” take on joint educational project
10:14 Brent Crude futures price up 0.05% to $64.92, Light Sweet Crude – up 0.11% to $61.03
09:49 Arctic Council will gather in Levi, Finland on 22-23 March 2018
09:17 Baltic Dry Index down to 1,169 points

2018 March 14

18:26 Port of Antwerp sets up maritime training institute in Brazil
18:06 Port of Oakland releases a new 5-year strategic plan
17:55 Baltic Workboats delivers ten more 15m Baltic wave piercing pilot boats to Denmark pilots stations
17:36 Fincantieri upgrades ultra-luxury cruise ship Silver Spirit