• 2018 October 18 14:24

    Bunker prices may change irregular next week amid rising volatility on global fuel market, expert says

    The Bunker Review is contributed by Marine Bunker Exchange
     
    World oil indexes ended last week with the first weekly loss in a while under the combined weight of various bearish factors, and downward trend continues this week as well. Some analysts still believe we could witness Brent at US$100 a barrel before the year’s end, while others are more guarded in their predictions. The market still questions whether OPEC can continue to produce oil in sufficient quantity to offset what is sure to be growing production declines in Iran and Venezuela.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), demonstrated slight downward evolution in the period of Oct.11 - Oct.18:
        
    380 HSFO - down from 486.36 to 478.29 USD/MT (-8.07)
    180 HSFO - down from 530.64 to 525.93 USD/MT (-4.71)
    MGO         - down from 752.00 to 737.43 USD/MT (-14.57)


    The Paris-based International Energy Agency (IEA) lowered its oil demand growth forecasts for 2018 and 2019 by 110,000 barrels a day (bpd), to 1.3 million bpd and 1.4 million bpd. The agency said that despite fresh U.S. sanctions set to take effect on Iran’s energy sector on November 5, global oil supply still remains robust. The IEA noted that global oil production increased by 1.4 million barrels per day on a net basis since May, which helped lead to an inventory build at an average rate of 0.5 million bpd during the second quarter and likely the third quarter as well. As a result of a sizable stockpile of oil in storage, and these higher levels of production, the oil market is not in danger of shortages at the moment. However, that has come at the expense of spare capacity, which is already down to only 2 percent of global demand.

    Diplomatic tensions escalated between Saudi Arabia and the West over the disappearance of journalist Jamal Khashoggi, who was a prominent critic of Riyadh's policies. Blocking potential investments deals or military sales could be already part of the discussions in Washington, London or Brussels. Saudi Arabia has said it will conduct an investigation into the disappearance. Market is concerned that Saudi Arabia could use oil supply to retaliate against its critics.

    Market also assumes the U.S. trade war with China to continue escalating, perhaps at an even more accelerated rate, when U.S. sanctions officially hit Iran next month. The counter-Iran action, however, is likely to be undercut by China, which currently buys around one quarter of Iranian crude and will not be joining a unilateral cut-off of Iranian oil imports. On the other part, in August China’s purchases of oil from the U.S. fell to zero, after China had been the largest buyer of American crude in the first half of the year. U.S. producers are still finding buyers, but are having to look elsewhere. Meanwhile, Russia and Saudi Arabia are replacing the U.S. as the main suppliers to China.

    Meantime, the U.S. has decided to go ahead with a planned meeting between President Trump and Chinese leader Xi Jingping in November to see if they can overcome trade differences. The U.S. Treasury is expected conclude that China has not been manipulating its currency, which is seen as a small overture to China from Washington. Some American officials that oppose the trade war hope that the Trump-Xi meeting could lead to a breakthrough.

    South Korea in turn has stopped importing crude oil from Iran ahead of the U.S. sanctions. The country imported zero Iranian oil in September for the first time in six years. Since the start of 2018, South Korean imports of Iranian crude had fallen by 49.1 percent from 2017, as of the end of September, to a total 7.15 million tons. South Korea is a close ally of the United States, and it is no surprise the country opted for full compliance with Washington’s insistence.

    In the first two weeks of October, Iran’s oil exports averaged 1.3 million barrels per day, down from the 1.6 million bpd it averaged in September, and down from the recent peak of 2.5 million bpd in April. As per OPEC sources, Iran’s oil production in September plunged by 150,000 bpd from August to reach 3.447 million bpd last month. It might be considered as the evidence that Iran has been cutting oil production, although not at the fast rate at which its exports have been dropping over the past two months. Iran, for its part, claims a much smaller loss in its oil production: Tehran self-reported to OPEC that its crude oil production in September stood at 3.755 million bpd, down by 51,000 bpd from August. Among all OPEC members, Iran booked the steepest decline in production in September, followed by another slump in Venezuela, this time by 42,000 bpd to 1.197 million bpd.

    Other OPEC members, however, almost entirely compensated for the loss of production in Iran and Venezuela—OPEC’s total production increased by 132,000 bpd in September to 32.761 million bpd. OPEC’s biggest producer Saudi Arabia lifted output to 10.512 million bpd. Another big jump came from Libya: production rose by 103,000 bpd to average 1.053 million bpd. Angola and Nigeria also contributed to the cartel’s higher production. OPEC’s key partner in the deal with the non-OPEC nations—Russia hit a post-Soviet record at 11.54 million bpd in September, up by 150,000 bpd from August.

    The latest Drilling Productivity Report from the EIA shows strong gains expected for next month. The EIA predicts the U.S. will add 98,000 bpd in November compared to a month earlier.

    China’s independent refiners will probably increase their intake of foreign oil by 23.9 percent to 2.1 million bpd this month. The total for the month will come in at 9 million tons, which is up from 7.26 million tons for September and will also be driven by falling inventories that need filling up and the nearing end of the year: private refiners have to use their import quotas before the new year starts. Beijing announced it will raise by 42 percent the oil import quota for its non-state refiners for 2019 as new refinery capacity is planned to enter into operation next year. As a result, freight rates for Aframax tankers to Asia have reached their highest level so far this year.

    North and South Korea agreed on Oct.15 to begin reconnecting rail and road links, another step in an improving relationship. They also agreed to discuss late this month a plan to pursue a bid to co-host the 2032 Olympic Games, and to explore in November ways to restart webcam reunions and video exchanges for families separated by the Korean War. Besides two countries dis-cussed a military pact which includes the reinstatement of a joint military commission, the halting of military exercises, a no-fly zone near their border and the gradual removal of landmines and guard posts within the Demilitarised Zone (DMZ). The thaw in ties between the neighbour countries has sparked U.S. concerns that it may be outpacing negotiations to dismantle the North's nuclear and missile programs.

    We expect bunker prices will change irregular next week amid rising volatility brought about by the impending U.S. sanctions against Tehran and the uncertainty surrounding other producers’ capacity to increase production quickly enough to offset any supply loss.

     

     

     

     

     

     

    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)




2019 March 21

18:05 Dublin Bay Biosphere to host international UNESCO EuroMAB Conference
17:53 Detachment of RF Navy’s Northern Fleet completed transfer through the Suez Canal
17:28 McDermott awarded ethylene contract in Russia
17:05 IMO and Saudi Arabia organize course for members of three key regional maritime security agreements to promote maritime security
16:35 Topaz secures contract extension with BP for 12 vessels in Azerbaijan
16:05 Incat announces construction of a 35m Catamaran Passenger Ferry for Samso Rederi
15:52 Kalmar's Eco Reachstackers and Empty Container Handlers to help Ter Haak Group Amsterdam improve the sustainability of its operations
15:31 Severnaya Verf lays down second processing trawler of Project 170701 for Norebo Holding
15:08 German shipyard Lürssen launches project Fiji yacht named Madsummer
14:39 GoodFuels and REINPLUS FIWADO Bunker fuel first inland vessel on 100% sustainable biofuel
14:13 Incat Crowther 35m ferry for Samso Rederi
13:55 Nuclear-powered container carrier Sevmorput on her first voyage under Arctic LNG 2 project
13:24 Andrei Chibis appointed Acting Governor of Murmansk Region
13:17 Coast Guard continues to break ice on Penobscot River to start on the Kennebec River
12:00 Steel cut for first short-sea LNG bunker vessel for Eesti Gaas at Damen Yichang Shipyard, China
11:39 15 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on March 20-21
11:13 Bunker prices go down at the Far East ports of Russia (graph)
10:50 Doha to host Ports & Maritime Evolution, Rail & Logistics Evolution, Road & Logistics Evolution Qatar Assembly & Expo in September’19
10:27 Brent Crude futures price is up 0.16% to $68.61, Light Sweet Crude – up 0.02% to $60.24
10:08 MAN receives an order for two-stroke engines from Eastern Pacific Shipping
10:05 MABUX: Bunker Market this morning March, 21
09:59 2018 revenues of FSUE Rosmorport grew by 7% Y-o-Y to over RUB 26 billion
09:22 Baltic Dry Index is down to 709 points
09:08 CMA CGM announces FAK rates from ISC to North Europe and the Mediterranean
09:00 PSA, PFR and IFM investors partner to jointly acquire the deepwater container terminal Gdańsk from Macquarie infrastructure and Real Assets, MTAA SUPER, AustralianSuper and Statewide Super
08:36 Port Canaveral starts construction of new Cruise Terminal 3 complex
07:58 SeaKing Electrical completes DFDS ferry upgrades in France

2019 March 20

18:00 Insight Into Contemporary Seafaring workshop held at Azerbaijan State Maritime Academy
17:43 Damen Cruise inks first contract with SeaDream Yacht Club
17:34 Wärtsilä prepares solutions for new state-of-the-art Wasaline ferry
17:34 Fire on Costa Smeralda under construction at Meyer Turku Shipyard not to affect building schedule
17:08 NOVATEK BoD recommends payment of RR 16.81 per ordinary share as 2018 dividend
16:46 Ukrainian seaports increased cargo handling by 2.5 million tons in January-February
16:22 ABP’s Hull Dry Bulks Terminal marks milestone handling biggest shipment
16:03 IMSSEA hosted “Maritime training and research activities” workshop
15:40 EU NAVFOR supports Somali / Ugandan maritime leadership training exercise course
15:21 Port of Long Beach Survey Director named
14:59 Finland’s Ministry of Transport and Communications appoints steering group to support reform of Act on Transport of Dangerous Goods
14:35 11 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on March 19-20
14:12 Nauticor and Destination Gotland start LNG bunkering in the port of Visby for MS “Visborg” with the world’s largest LNG bunker supply vessel “Kairos”
13:57 DNV GL has joined RAO/CIS Offshore 2019 as Sponsor of a conference session
13:32 TechnipFMC awarded subsea contract for the Equinor Johan Sverdrup Phase 2 development
13:11 BC Ferries reveals 25-year vision for Swartz Bay Terminal
12:49 RF Government approves implementation plan for construction of Kamchatka LNG terminal
12:30 Havyard delivers the third battery-run ferry for the Hareid–Sulesund route to Fjord1
12:04 A.P. Møller - Mærsk A/S announces the completion of the sale of ordinary shares in Total S.A.
11:48 Draft law on amendments to crab harvest quota distribution submitted by RF Government to State Duma
11:30 Brexit: Port of Rotterdam starts leafleting campaign at ferry-terminals
11:03 PD Ports welcomes Offshore Wind Sector Deal
10:44 Brent Crude futures price is up 0.20% to $67.81, Light Sweet Crude – up 0.04% to $59.33
10:26 NYK signs Japan’s first ESG management support loan
10:10 Bunker prices go down at the port of Saint-Petersburg, Russia (graph)
09:47 AS Tallink Grupp extends vessel charter agreement
09:22 Baltic Dry Index is down to 712 points
09:08 MABUX: Bunker market this morning, Mar.20.

2019 March 19

18:25 Navigation support tool receives 2018 Hydrographic Technology Encouragement Award
18:05 NYK holds conferences to improve the safety of its dry bulk fleet
17:36 Abu Dhabi Ports collects over 120 tons of floating sea debris
17:05 JAXPORT sets record with largest container ship to call Jacksonville
16:35 NYK introduces its market analysis initiatives using AI and big data