• 2018 June 21 15:50

    MABUX: All eyes are on what course of action OPEC will call for

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have had rather volatile week with irregular fluctuations. Plenty of factors are influencing fuel prices right now, and the OPEC+ decision expected on June 22 will be the single most important driver in the near-term. There are still fears that OPEC could ease production curbs to offset falling supplies in Venezuela and an expected drop in Iran oil exports as U.S. sanctions loom.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) demonstrated clearly defined downward trend in the period of June 14 – June 21:
        
    380 HSFO - down from 429.86 to 424,36 USD/MT (-5.50)
    180 HSFO - down from 471.79 to 462,29 USD/MT (-9.50)
    MGO         - down from 678.71 to 661.36 USD/MT (-17.35)


    On the forecast side, the International Energy Agency (IEA) said that robust U.S. shale growth will underpin 2.0 million barrels per day (bpd) of non-OPEC supply growth this year, plus 1.7 million of non-OPEC output gains in 2019. That should more than meet demand growth. The agency also warned that even if the Iran-Venezuela supply gap is plugged, the market will be finely balanced next year, and vulnerable to prices rising higher in the event of further disruption.

    Russia and Saudi Arabia said ahead of OPEC meeting, that even if the current OPEC/NOPEC oil production cut deal goes to pieces, both largest oil producers will be willing to go it alone, suggesting that some kind of market-managing efforts may remain in place, even if Iran and Iraq begin to disturb the collaboration. At the moment it is reported that Saudi Arabia and Russia will propose an increase in production beginning from July 1, with the range of the suggested in-crease at between 500,000 bpd and 1.5 million bpd. Both countries increased their May oil production to calm the oil market.

    Meantime, some OPEC members (including Iran, Venezuela, and Iraq) are opposing an increase in production and argue that the pact should stay intact through the end of 2018, as planned. Iran’s OPEC representative said the country will veto any proposal for a production increase with the support of Venezuela and Iraq. Venezuela is already struggling with an inexorable decline in its oil production, which to a significant extent drove the overcompliance of the OPEC+ bloc with the agreed production cuts. Iraq, for its part, is eager to expand its production capacity but it will take time to do so. So, right now these three OPEC members are at a clear disadvantage to those capable of quickly restoring pre-agreement production levels.

    There are a few possibilities from the upcoming OPEC meeting. First, Saudi Arabia and Russia may convince the group to agree to an increase in output, and while everyone nominally is al-lowed to increase output a bit, the two top producers make up the biggest share of the increase. Another possibility is a breakdown in negotiations and Saudi Arabia and Russia go their own way, increasing output. Or, talks could breakdown and there is no change in output, although with the upside risk to prices, this seems unlikely.

    Venezuela’s production plummeted again in May, by 42,500 bpd from April to below 1.4 mil-lion bpd—1.392 million bpd. The IEA forecasts that Venezuela’s oil production could drop to just 800,000 bpd or even lower next year. Venezuela’s rig count number is in the 20s, while it needs it into above-40 territory to sustain production flat.

    The major Libyan oil ports of Ras Lanuf and Es Sider were closed and evacuated after armed brigades opposed to the eastern commander Khalifa Haftar stormed them, causing a production loss of around 260,000 barrels per day (bpd). The two facilities account for 40 percent of Libya’s oil exports. Libya’s National Oil Corporation (NOC) said it had evacuated all staff from the two terminals as a precautionary measure. More than half the storage tanks at both terminals were badly damaged in previous fighting and have yet to be repaired, though there have been regular loadings from Es Sider.

    It was reported a dip in the number of active oil and gas rigs in the United States last week. Oil and gas rigs decreased by 3 rigs, with the number of oil rigs increasing by 1, and the number of gas rigs decreasing by 4. The oil and gas rig count now stands at 1,059—up 126 from this time last year.

    US oil production continues putting downward pressure on fuel prices, and for the week ending June 15, production reached 10.900 million bpd—close to 11 million bpd production that many had forecast for the year.

    The U.S. Federal Reserve announced another rate hike, which helped edge up the dollar to a new high for the year. Meanwhile, the European Central Bank is heading in the other direction in an effort to keep sovereign bond yields under control. The ECB said it would keep interest rates low through at least next summer. The diverging policy paths for the two central banks points to a further strengthening of the dollar relative to the euro.

    India and China have discussed creating an oil buyers’ club to be able to negotiate better prices with oil exporting countries and will be looking to import more U.S. crude oil in order to reduce OPEC’s influence, both over the global oil market and over prices. India has been saying for months that oil prices have risen too much to be sustainable for many oil-importing countries.

    More crude oil is being stored on ships at sea in European waters than at any time in the past 18 months. A quarter of global floating storage is now located in European waters, compared to just 10 percent in March and April. The sudden increase in oil stored at sea is the result of Asian buyers raising up cargoes from the U.S., rather than from Nigeria, Angola and the Middle East.

    Sentiment on fuel prices remained mostly negative, as markets continue to fear OPEC, as its meeting could ease production curbs to offset falling supplies in Venezuela and an expected drop in Iran oil exports as U.S. sanctions loom.  So, all eyes are on what course of action OPEC will call for.  We expect OPEC will increase the output and so bunker prices may continue downward evolution next week.



     

     

     

     

     

     

    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 July 18

18:31 Naval Group posts H1 2018 performance results
18:00 BC Ferries announces sponsorship of the Nicholas Sonntag Marine Education Centre
17:36 DP World announces closing of Continental Warehousing Corporation (India) transaction
17:12 Marine Technics to participate in International Far East Maritime Show-2018
16:44 Oleg Bukin elected as Chairman of Tuapse Commercial Seaport BoD
16:23 Transocean and Chevron Australia ink 11-well contract
15:45 Stena Bulk positions itself in crude oil
15:19 Transocean announces 13-well contract for Transocean 712
14:57 AGCS issued Safety & Shipping Review 2018
14:43 Scandlines Helsingborg-Helsingör kicks off the holiday traffic season without delay
14:18 Intermarine UK promotes Portland Port to Government minister
14:00 Szczecin to become the capital of Baltic seaports in September
13:31 OHT to order ULSTEIN-designed heavy lift transport and installation vessel
12:59 Ports of Szczecin and Świnoujście announce 12-pct increase of cargo handling in HI’18
12:22 Dorian LPG confirms receipt of director nominations from BW LPG
11:50 Throughput of Ukraine’s seaports in HI’18 fell by 3.1% Y-o-Y to 53.8 million tonnes
11:25 TTS Colibri 3D compensated crane passes FAT
11:03 Overseas Shipholding Group places order for cemical tanker duo with Hyundai Mipo Dockyard
10:41 Yaroslavsky Shipbuilding Plant launches Svetlyak-class patrol boat Balaklava
10:32 Brent Crude futures price down 0.35% to $71.91, Light Sweet Crude – down 0.36% to $66.92
10:16 ICS encouraged by IMO progress on 2020 global sulphur cap implementation issues
09:59 Bunker prices continue going down at the Port of Saint-Petersburg, Russia (graph)
09:40 Throughput of Russian seaports in 6M’18 grew by 2.8% Y-o-Y to 394.8 million tonnes (detalization)
09:16 Baltic Dry Index up to 1,721 points

2018 July 17

18:24 North P&I Club and 24Vision ink partnership agreement
18:07 Lockheed Martin awarded Navy's contract worth more than $450 million in FMS funding for MMSC project
17:55 TransContainer announced its operating results for the second quarter and the first half of 2018
17:27 Equinor buys shares for use in the group's Share saving plan
17:11 Vigor Marine LLC gets Navy's contract for USNS Mercy mid-term availability
16:56 Okskaya Sudoverf puts into operation Belmax 4, fourth non-self-propelled barge of Project ROB20
16:34 Prosafe awarded important contract in Brazil
15:47 Orsted opts for Tekmar's CPS for Borssele 1 and 2 offshore wind farm projects
15:28 Port of Rotterdam places a bee colony in the port area
14:44 Baltic Ports Conference 2018 will focus on financing, economy and energy supply
14:23 Jan De Nul launches ultra-low emission vessel Diogo Cão in China
13:41 Severnaya Verf will lay down a longline factory vessel Gandvik-1 on July 20
13:16 Tidewater and GulfMark to combine to create global offshore leader
12:48 Containership MOL Truth earned 'Ship of the Year 2017'
12:19 15,000 TEU container ship “Afif” named in London Gateway
11:27 Huntington Ingalls begins post-delivery work on USS Gerald R. Ford (CVN 78)
11:17 Boskalis secures contract of total value of $65 million
10:53 Fuel oil prices are flat at the Far East ports of Russia (graph)
10:29 ABS to class FSRU for Turkey’s oil and gas distributor
10:00 Brent Crude futures price up 0.28% to $72.04, Light Sweet Crude – down 0.01% to $67.06
09:14 Baltic Dry Index up to 1,695 points

2018 July 16

18:31 APL adds port calls to West Asia Express Service
18:16 Diana Shipping announces signing and drawdown of a US$75M Term Loan Facility with BNP Paribas
17:55 Director Kopczynska addresses WMU students and faculty on maritime Europe
17:40 Great Lakes announces receipt of $70 million San Jacinto award
17:33 Bollinger Shipyards commits USCG icebreaker program to Florida
17:31 New vehicle terminal announced at the Port of Southampton
17:18 Hapag-Lloyd hikes rates for East Asia-Arabian Gulf trade
17:08 ING Bank signed a USD 80 million syndicated loan agreement with NIBULON
16:43 Minimum training standards for fishers under review
16:25 USCG rescues 7 people from capsized boat near Horn Island
16:20 Port of Antwerp sets new records with best half year ever
15:56 Freeport of Riga showed good growth in the first half of 2018
15:32 Maersk Drilling secures two contract extensions in the North Sea
15:19 Container throughput of port Hong Kong (China) down 3.6% to 9.88 million TEUs in Jan-June’18
15:03 Van Oord will acquire MPI Offshore