• 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 December 15

16:23 MOL Passenger Line receives award for outstanding performance in 'Cruise of the Year 2018'
14:53 CMA CGM to implement GRR for India East Coast-West Africa trade
13:51 CMA CGM announces LSS on services from / to China, Hong Kong and Taiwan
12:44 NYK Cruises receives Grand Prix Award for 2018 World Cruise
11:27 TT-Line places order for RoPax "green" ferry with China's Jiangsu Jinling Shipyard

2018 December 14

18:17 Hapag-Lloyd to increase rates from East Asia to Mexico, Central America, West Coast of South America, Caribbean & Panama
17:48 Petersburg Oil Terminal puts into operation its emergency response team
17:33 Vinalines to open container shipping centre next week
17:30 Fairway adjustment will simplify Elbe traffic control already next year
17:27 Final cruise ship for the year calls to the Port of Gothenburg
17:23 The MV Magda joins the Klaveness Bulkhandling pool
17:16 India’s containerised export up 10% in the third quarter of 2018
17:13 FSL Trust announces newbuilding agreement for the construction of two LR2 product tankers
17:13 Havyard project with Havila Kystruten on hydrogen-powered coastal route operations to receive over NOK 100 million in funding from Pilot-E
16:24 World Fuel Services expands bunker operations in US leading up to 2020
15:57 IMO held training workshops in Cameroon Single Window for Foreign Trade Transactions
14:49 Onezhsky Shipyard lays down self-propelled hopper barge of Project HB600
14:08 Irish Continental Group plc takes delivery of cruise ferry W.B.Yeats
13:55 WMU takes part in Ocean Literacy Conference
13:31 First in industry ADNOC co-loads LPG and propylene onto same vessel in Ruwais
13:10 WMU hosted round table discussion regarding key challenges facing IMO
12:53 Bunker market at the Port of Saint-Petersburg, Russia shows mixed price movements (graph)
12:32 Nordic American Offshore secures contract for its PSV NAO Viking
12:11 Rosrybolovstvo supports 2nd Dredging and Hydraulic Engineering Structures Congress
11:50 Association of Commercial Sea Ports celebrates its 30th anniversary
11:24 Gazprom and Itochu sign MoU under Baltic LNG project
11:06 Scorpio Bulkers announces time charter-out agreement
10:48 Domestic ferry safety exercise conducted in Indonesia
10:25 IMO holds training for managing insecurity in west Indian Ocean and Gulf of Aden
10:06 EC adds six new yards to its ‘European List of ship recycling facilities’
09:47 Brent Crude futures price down 0.61% to $61.05, Light Sweet Crude – down 0.4% to $52.37
09:25 GTT notified by HSHI for the tank design of two new LNG carriers for CMM
09:18 Baltic Dry Index is up to 1,365 points
08:06 Fincantieri publishes its Sustainability Plan 2018-2022
07:14 Port of Long Beach cargo volume up to 621,835 TEU in November 2018
06:09 Mitsubishi Shipbuilding holds christening ceremony for LPG carrier "LAUREL PRIME"

2018 December 13

18:43 Coal exports via Rosterminalugol hit 19-millionth tonne mark
18:28 Port of Kaliningrad throughput in Jan-Nov rose 4% to nearly 13 million tonnes
18:25 Tideway completes installation of longest AC offshore wind export cable at Hornsea One in the UK
17:49 Hapag-Lloyd to cancel calls at Port of Bremerhaven
17:25 Building of Johan Sverdrup Phase II begins
17:19 Port of Vyborg 11-month cargo volumes soar 24% to 1.72 million tonnes
17:13 Seabridge first in Belgium to receive the SCA certificate
17:08 Jan De Nul cleans up polluted beaches along the coast in southern France
17:07 Bunker fuel prices at Far Eastern ports close the week lower
17:00 Murmansk Region will improve water safety regulations – Marina Kovtun
16:47 Port of Vysotsk cargo volume in Jan-Nov rises 6% to 16.86 million tonnes
16:36 Maersk Broker Bulk Chartering and NAODAN Chartering
16:30 Murmansk Region Governor is a member of revised State Commission for Arctic Development Issues
16:26 YILPORT Holding wins Port Operator Award at Lloyd’s List Global Awards
16:03 Rosmorport releases RFPs for design of an DF 12/14MW icebreaker
15:49 Jotun and Kansai Paint build relationship to meet marine and protective demand
15:46 Baltic Sea Ports Authority icebreakers assist merchant vessels in the Gulf of Finland
15:21 Containerships receives its first LNG-powered container vessel
14:44 Uncertainty lingers in fuel markets despite OPEC cuts
14:17 Maersk Line receives Containership Operator of the Year award
14:13 Iran-Indonesia to develop port cooperation
13:22 NOIA: U.S. territories need the Offshore Wind for Territories Act
13:12 QPS inks first "Green Loan" with BNP Paribas
12:48 Panama Canal signs agreement with Brazil's Port of Itaqui