• 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 January 18

14:03 Algoma Central Corporation increases its interest in ocean self-unloader Pool
13:50 18 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on January 17-18
13:35 Throughput of the Port of St. Petersburg in 2018 up 11% Y-o-Y to 59.32 million tonnes
13:18 CMA CGM unites its Containerships and MacAndrews brands
13:11 Vladimir Putin supports Government’s proposal on expanding Far East Ministry’s functions with Arctic issues
12:49 Throughput of port Kavkaz in 2018 grew by 11% Y-o-Y to 49.276 million tonnes
12:26 MV Werften purchases Neptun Ship Design
12:08 Sakaide shipyard holds naming ceremony for new LNG carrier jointly owned by NYK and JERA
11:38 PGNiG SA signs agreement for oil and gas exploration and production in UAE
11:14 Remote pilotage to be allowed in Finland
10:47 Free zone status is a crucial advantage for the future development of the Freeport of Riga
10:06 Ice restrictions at the port of Ust-Luga come into effect on January 31
09:42 Brent Crude futures price up 0.9% to $61.73, Light Sweet Crude – up 1.09% to $52.64
09:20 Baltic Dry Index is up to 1,077 points

2019 January 17

18:13 PORT OF KIEL presents annual results 2018
17:51 Ice restrictions at the port of Primorsk come into effect on January 25
17:28 Global Ports sets up a common service call centre
17:09 EFIP welcomes and supports the European Parliament position on the Connecting Europe Facility for 2021-2027
17:05 North Sea Port monitoring the Brexit closely
16:44 ABP invests £700K to boost storage at Port of Ipswich
16:27 Global fuel market: still many uncertainties in both demand and supply
16:22 CMA CGM announces FAK rates from ISC to North Europe and the Mediterranean
16:05 OCEAN Alliance extends duration of OCEAN Alliance to ten years
15:42 COSCO SHIPPING Ports signs agreement with PSA to add two new berths at the terminal in Boao, Hainan
15:31 Liebherr supports the 6th International Forum of Dredging Companies as its Sponsor
15:02 Ocean Yield ASA agrees to acquire a modern Suezmax tanker for a consideration of USD 56.0 mln
14:02 SEACOR Marine enters agreement to acquire three additional platform supply vessels from affiliates of COSCO Shipping Group
13:49 Throughput of Chinese ports grew by 4.2% to 9.22 billion tonnes in 2018
13:32 Jensen Maritime provides design for Shaver Transportation’s new tugboat
13:14 OOCL rolls out third phase of Ocean Alliance product refinements
12:50 Baltic Ports Organization’s schedule for 2019 is set
12:38 Port of Los Angeles breaks all-time cargo record in 2018
12:26 Qatar accedes to load lines convention
12:01 Sunseeker International and Rolls-Royce to present first production yacht with MTU hybrid power in 2020
11:51 Bunker prices continue going down at the Far East ports of Russia (graph)
11:38 Port of Zeebrugge handled 40.1 million tonnes in 2018
11:25 Nor-Shipping reveals stellar line-up for Ocean Leadership Conference
10:52 10 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on January 16-17
10:28 NOVATEK’s hydrocarbon production totaled 548.4 million boe in 2018, up 6.9% Y-o-Y
10:03 Brent Crude futures price down 0.34% to $61.11, Light Sweet Crude – down 0.54% to $52.03
09:39 Tallink and Taltech to collaborate on developing smart ship solutions
09:17 Baltic Dry Index is down to 1,055 points

2019 January 16

18:36 Kongsberg Gruppen enters into an agreement with Rome AS to divest Kongsberg Evotec
18:06 Seaspan Corporation announces the closing of the second tranche of the $1 billion aggregate investment commitment by Fairfax
17:55 INEOS, Europe’s largest petrochemicals company, announces Antwerp as the location for its new ground breaking 3 billion Euro petrochemical investment
17:50 Throughput of Rostov-on-Don port in 2018 grew by 11.5% Y-o-Y to 24.1 million tonnes
17:36 Rolf A. Sandvik resigns as CEO of The Fjords
17:06 Digging begins in construction of new Antarctic wharf
16:52 Throughput of Russian seaports in 2018 grew by 3.8% Y-o-Y to 816.5 million tonnes (detalization)
16:31 IMO’s polar communication and navigation equipment guidance to be finalized
16:14 COSCO Shipping Lines launches Ocean Alliance 2019 service products
16:10 Ice restrictions at Passenger Port of Saint-Petersburg come into effect on January 25
16:05 Realogis publishes market report on the letting of logistics properties and industrial sites in the greater Hamburg area for 2018
15:46 Ice restrictions at Big Port of St. Petersburg come into effect on January 25
15:33 Verifavia Shipping cements leadership position for EU MRV and IMO DCS IT system certification
15:22 Throughput of Makhachkala Commercial Sea Port almost doubled in 2018 to 2.5 million tonnes
14:57 Houston, Texas will host the 3rd LNG USA Summit on 26-27 February 2019
14:31 Milan, Italy will host the 2nd Small-Scale LNG Summit on 12 February 2019
13:54 CHARLES ANDRÉ Group and Dunkerque-Port join forces to develop combined transport service from Dunkerque
13:25 Société Générale and MPA Singapore join SEA\LNG Board