• 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 September 21

18:06 Forth Ports wins prestigious award for community work
17:44 NCSP Group's cargo turnover for January–July 2018 totaled 82,351 thousand tons
17:28 First ISO-container ever loaded with liquefied natural gas at the LNG terminal in Świnoujście
17:06 Gibdock, RSP Systems and New Zealand fisheries choose LR
16:31 Outlook for marine cargo insurance challenging but opportunities remain for underwriters, says IUMI
16:04 Babcock ecoSMRT receives LR acknowledgement for ship application
15:09 Trafigura holds naming ceremony for first of 35 newbuild crude oil and product tankers
14:56 IBIA takes part in SIBCON 2018
14:27 Krasnoye Sormovo shipyard launches Pola Fiva, fifth dry cargo carrier of Project RSD59 built for Pola Rise
14:09 British International Freight Association fumes over sulphur surcharge
13:52 Ukraine’s water transport carried 0.5 million passengers in 8M’18, up 10.5%, Y-o-Y
13:31 Maersk’s regional carriers go to market under one brand
13:09 GE Shipping takes delivery of Secondhand Very Large Gas Carrier “ Jag Vasant ”
12:50 ABP aims for frictionless trade with blockchain
12:28 Cargo transportation by Ukraine’s water transport declined by 1.9% to 3.6 million tonnes in 8M’18
12:09 COSCO SHIPPING Tanker (Dalian) takes delivery of 319,000 dwt Mt Cosnew Lake
11:07 Odfjell finalizes sale of Rotterdam tank terminal
10:36 ABP promotes South Wales ports as cruise destinations
10:07 Georgia Ports plan 8 million TEU capacity by 2028
09:54 Brent Crude futures price up 0.06% to $78.75, Light Sweet Crude – up 0.14% to $70.22
09:35 Bunker prices are going up at the Port of Saint-Petersburg, Russia (graph)
09:16 Baltic Dry Index is up to 1,396 points
09:03 APL’s Eagle Express service makes a solution for precise logistics management
08:07 Yang Ming to upgrade China-Vietnam-Thailand service
07:20 Iskes Towage names twin Damen ASD Tugs 3212 Mars and Mercurius

2018 September 20

21:17 Expert says production declines and geopolitical unrest may push bunker prices up
18:02 SITC holds naming & delivery ceremony for M/V “SITC TOYOHASHI”
17:54 Sovcomflot participates in Eastern Economic Forum’s business programme
17:30 Kurt Bodewig appointed as new European Coordinator for Motorways of the Sea
17:07 Port of Singapore holds annual multi-agency ferry emergency exercise
16:46 IAPH regional conference sets pan-African ports agenda
16:25 UAE to host Dubai Marine Insurance Conference 2018 on November 20-21
16:07 Governments of New Zealand and Australian announce fumigation requirement for import cargos
15:48 Sovcomflot is a Partner of the Second Conference “LNG Fleet and LNG Bunkering in Russia”
15:32 NYK product tanker rescues 28 fishermen off the coast of Colombia
15:04 CMA CGM announces GRR from Asia to West Africa
14:56 Admiralteiskie Verfi launches the Kronshtadt, diesel-electric submarine of Project 677
14:32 DNV GL releases autonomous and remotely operated ship guideline (UPDATE)
14:04 Port of Long Beach awarded $4.2 mln security grant
13:32 ABS supports innovative yacht design with dedicated guidance notes and software
13:20 Finnish Transport Agency: international seaborne transport volumes show significant boost
13:04 Port of Antwerp works on structural solutions to improve mobility
12:43 Arctic group of RF Navy’s Northern Fleet enters Chukchi Sea through Bering Strait
12:30 Wison receives AiP from LR for 300MW FSRP
12:04 Port of Rotterdam and Rönesans Holding sign agreement for petrochemical industrial zone in Turkey
11:49 IMO to start consideration of legal framework for low-flashpoint diesel
11:30 Gulftainer signs 50-year, $600 million concession to operate and expand Port of Wilmington in Delaware, USA
11:18 Fuel oil prices are going up the Far East ports of Russia (graph)
11:04 Green Corridor JIP delivers innovative bulk carrier designs for a low emissions future
10:55 IMO takes important step to facilitate use of methanol
10:30 HHI receives AiP from LR for a VLGC design capable of using LPG as fuel
10:19 Brent Crude futures price up 0.3% to $79.64, Light Sweet Crude – up 0.61% to $71.2
10:03 OpenIJ starts sinking operation of the lock gate chamber at the Port of Amsterdam
09:50 Passenger Port of Saint-Petersburg ("Marine Façade") welcomed MSC Meraviglia
09:34 CMA CGM announces GRR from India to East Africa
09:17 Baltic Dry Index is up to 1,373 points
09:03 Port of Rotterdam organises information meeting about the replacement of Maaskade quay wall
08:34 DNV GL launches revised design standard and new certification guideline for floating wind turbines
08:04 ABS issues AIP for Jiangnan’s LNG Jumbo

2018 September 19

18:10 Significant reserve growth confirmed at the Utrenneye field