• 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 June 21

18:27 Diana Shipping announces time charter contract for m/v Philadelphia with Koch
18:00 CMA CGM announces new rotation on ASAF service
17:56 Russia is in need of small bunkering tankers, LNG bunker supply ships and bunker barges - Damen
17:31 Gate terminal (Gasunie/Vopak) to increase ship loading flow rate
16:58 Antwerp blockchain pilot pioneers with secure and efficient document workflow
16:24 Freeport of Riga Authority joins Cruise Lines International Association
16:02 Danaos Corporation announces comprehensive debt refinancing agreement
15:50 MABUX: All eyes are on what course of action OPEC will call for
15:40 12 LNG bunker supply ships to be put into operation in Singapore by 2025
15:02 Ship garbage recycling pilot wraps up at Port of Brisbane
14:39 Vyborg Shipyard launches port icebreaker Ob built for FSUE Atomflot
14:02 APM Terminals supports World Clean Air Day with App upgrade
13:41 Igor Zolotykh appointed as Harbour Master of port Ust-Luga
13:23 Victor Olersky appoints Igor Ishchenko as Harbour Master of port Primorsk
13:02 EU member states’ experts on ship recycling meet in Brussels
12:39 XI Russian Forum “Current State and Prospects for Development of Russian Bunker Services Market” opens in Saint-Petersburg
12:16 ABS issues industry-leading Guide advancing DC power for hybrid electric applications
12:00 Largest gantry crane in the Nordic countries delivered to Meyer Turku
11:57 HVCC Hamburg Vessel Coordination Center and the Rotterdam Port Authority launch unique cooperation
10:55 CMA CGM to acquire CONTAINERSHIPS, a leader in intra-regional transportation in Northern Europe
10:53 Protecting marine life from ship noise is in the focus of meeting on oceans and the law of the sea
10:28 Brent Crude futures price up 0.41% to $75.41, Light Sweet Crude – down 0.59% to $65.3
10:02 Maritime officials in Morocco undergo training at IMO workshop in Casablanca
09:41 Closer look at the interpretation of maritime law
09:19 Baltic Dry Index down to 1,373 points

2018 June 20

18:00 Lead landing ship of Project 11711, Ivan Gren, joins the fleet of RF Navy
17:33 Rosatomflot extends its winter-spring navigation period amid challenging ice conditions
17:05 Genco Shipping & Trading Limited completes common stock offering
16:05 Seatruck Ferries to use larger vessels for Warrenpoint service
15:51 Maritime leaders endorse green initiatives for shipping
15:30 Mitsui to make entry into subsea support vessel business through acquisition of shares in AKOFS Offshore
15:04 Eighty-two Crowley vessels honored with Jones F. Devlin Awards in recognition of 613 combined years of safe operations
14:59 GasLog Partners LP announces new charter agreement with Cheniere Energy
14:24 Small icebreakers of Project 22740 can be converted to run on LNG
14:05 Cheniere Energy and Cheniere Energy Partners announce definitive merger agreement
13:13 ABB brings efficiency and sustainability through system integration to two new Indian ferries
12:39 Dredging works commenced at the port of Ust-Luga
12:01 ABP Southampton publishes Air Quality Strategy with package of commitments
11:20 Bunker prices are down up at the port of Novorossiysk, Russia (graph)
11:01 Crowley adds 40 ISO tanks
10:45 Yaroslavsky Shipbuilding Plant completed the series of six boom-laying boats
10:31 GTT receives an order from Hyundai Heavy Industries to design the tanks of a new LNG carrier
10:22 Brent Crude futures price up 0.41% to $75.41, Light Sweet Crude – down 0.59% to $65.3
10:05 Euroports increases pulp & paper warehousing capacity in Tarragona, Spain
10:00 RF Government expands the list of publicly funded projects in seaports and on IWW of Russia
09:37 Bunker prices continue going down at the Port of Saint-Petersburg, Russia (graph)
09:16 Baltic Dry Index down to 1,419 points

2018 June 19

18:06 100 million dollars to link the Nile with Suez Canal Region
17:03 DNV GL partners with the EU and Government of India to bring offshore wind to the Indian market
16:32 CMA CGM deploys its innovative solution for containers tracking, TRAXENS by CMA CGM
16:18 APM Terminals ‘Cool port’ barge service speeds up distribution from Rotterdam
16:02 Multraship acquires an ASD Tug from Med Marine for Terneuzen operations
15:32 Koper remains the most important port for Austria
15:02 CMA CGM announces GRR from East Coast South America to Africa, Gulf and West Coast North of India
14:32 Port of Oakland import volume flat in May 2018
14:25 Europort Romania maintains its position as the premier Black Sea martime event
14:02 British Ports Association comments on new report on Northern ‘Free Ports’ strategy proposal
13:32 Port seeks to double rail volume with Railport Antwerpen
13:02 Rijkswaterstaat awarded Van Oord the contract to dredge Marker Wadden channel
12:32 MOL to make full-scale move into subsea support vessel business by acquiring stake in AKOFS of Norway