• 2019 February 14 16:03

    Expert expects uncertainty on global fuel market next week

    The Bunker Review is contributed by Marine Bunker Exchange

    Despite the crisis in Venezuela, which could shut in a lot more oil supply, global oil indexes have been mostly flat for two weeks. Market has weighed prospect of serous outages in Libya, Iran and Venezuela against the unfolding slowdown in the global economy.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), has demonstrated slight upward trend in the period of Feb.07 – Feb.14:
        
    380 HSFO - up from 398.43 to 408.21 USD/MT (+9.78)
    180 HSFO - up from 442.14 to 452.07 USD/MT (+9.93)
    MGO         - up from 617.14 to 620.64 USD/MT (+3.50)


    Fuel indexes were pressured after Russia said there were no substantial talks currently taking place to establish an alliance between Russia and OPEC while a charter outlining open-ended cooperation could be discussed when the two groups meet in April. It was also added that it was highly unlikely OPEC and other oil producers would set up a joint structure due to the additional red tape it would create, as well as the risk of U.S. sanctions against monopolies.  Besides, while Moscow had committed to production cuts with OPEC to boost crude prices, it is unlikely to get any deeper into the cartel's cuts to risk its own oil market share in the long run. Reuters reported on Feb.11 that the OPEC and its allies had drafted a document for setting up a new alliance but had carefully avoided any mention of sensitive issues such as oil prices.

    OPEC cut its forecast for 2019 world oil demand due to slowing economies and expectations of faster supply growth from rivals, underlining its challenge to prevent a surplus even as it starts new production cuts. Forecast for 2019 said demand for its crude would fall to 30.59 million barrels per day, 240,000 bpd less than predicted last month. OPEC also said its oil output fell by 797,000 bpd month on month to 30.806 million bpd in January. That amounts to 86 percent compliance with pledged cuts.

    The U.S. House Judiciary Committee passed a bill that would allow the U.S. Justice Department to sue members of OPEC for manipulating the oil market. The legislation has bipartisan support in the Congress, although it’s not clear where President Trump stands. The so-called NOPEC bill would remove sovereign immunity, exposing member countries to antitrust regulation. If the NOPEC legislation were to become law, it could theoretically make it much more difficult for OPEC to set production limits with the aim of achieving certain price targets. It could also put in jeopardy the formalization of the OPEC/non-OPEC alliance with Russia.

    The U.S. said Iran’s oil customers should not expect new U.S. waivers in May, urging buyers to stop importing Iranian oil. Some of them, including the four major Asian buyers of Iranian oil - China, India, Japan, and South Korea - have recently resumed buying limited volumes of Iranian crude oil, after a period of around a month and a half in which they had to clarify how much and under what conditions they would purchase oil from Iran. Earlier last week, Iran criticized Italy and Greece for not buying Iranian oil despite the fact that they had obtained waivers to do so.

    Another risk to supply comes from Venezuela after the implementation of U.S. sanctions against the OPEC member’s petroleum industry in late January. It is expected this move to knock out 300,000-500,000 bpd of exports. Sanctions also prohibit U.S. diluents from heading to Venezuela. Without diluents, Venezuela cannot process its heavy crude and would be forced to shut down output. However, Russia’s Rosneft is reportedly sending some oil products to Venezuela to keep production from collapsing. As a result, Venezuela’s oil production may not utterly collapse, which could keep Maduro in power further. However, U.S. sanctions could still lead to mass starvation, exploding humanitarian crisis.

    Forces loyal to Libya’s eastern leader Khalifa Haftar have taken control of the country’s biggest oil field (300,000 barrel-per-day production) and say the deposit is secure and ready to resume production. Libya holds Africa’s largest crude reserves, and the lack of clarity about troop movements and security in the south had cast doubt on the nation’s plan to boost output to 2.1 million barrels a day by the end of 2021. Libya’s internal turmoil led the OPEC in December to exempt it from participating in global production cuts.

    U.S. and Chinese trade negotiators are meeting in Beijing this week to try and reach a deal be-fore a March 1 deadline when higher American tariffs on Chinese imports take effect. It was reported President Donald Trump wants to meet Chinese President Xi Jinping very soon, an optimistic sign for investors who are becoming increasingly concerned there won’t be an agreement. Without a comprehensive deal on a range of trade issues, the Trump administration has threatened to increase tariffs on $200 billion worth of Chinese goods from 10 to 25 percent. An increase in tariffs, could tip the global economy into recession, forcing OPEC+ to extend its cuts, although it would leave much more room to take a harder line on Iran. Such an outcome on the trade issue would be hugely negative for oil and fuel prices.

    Lower growth forecasts from the European Union also heightened fears of a global economic slowdown. The European Commission sharply cut its forecasts for euro zone economic growth due to global trade tensions and an array of domestic challenges. Euro zone growth this year would slow to 1.3 percent from 1.9 percent in 2018, before rebounding in 2020 to 1.6 percent.

    It was reported an increase in the number of active oil and gas rigs in the United States last week. The total number of active oil and gas drilling rigs rose by 4 rigs, with the number of active oil rigs increasing by 7 to reach 854 and the number of gas rigs decreasing by 3 to reach 195. The oil and gas rig count is now 74 up from this time last year, 63 of which is in oil rigs. The EIA’s estimates for US production for the week ending February 1 shows an increase at an average rate of 11.9 million bpd? - a record for the US - for the fourth week in a row.

    Outlook for the coming week

    We expect the uncertainty on global fuel market to continue next week followed by irregular changes of bunker prices.  

     

     

     

     

     

     

     

    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 February 19

18:03 San Vicente Terminal Internacional receives two state-of-the-art cranes to enhance operations
17:50 Throughput of port Kavkaz in Jan’2019 fell by 8% Y-o-Y to 1.82 million tonnes
17:26 Moody´s upgrades Hapag-Lloyd credit rating to B1
17:03 Jan De Nul and Government of the People’s Republic of Bangladesh enter into agreement for the development and dredging of access channels, turning basins, anchorages and berthing areas
16:29 TMA Logistics, CTU and VCL join forces to establish Amsterdam-Utrecht-Rotterdam-Corridor
16:21 NIBULON shipbuilders finish constructing a series of POSS-115 Project tugs
16:03 MOL conducts underwater drone demonstration test for vessel bottom inspection
15:25 Wärtsilä’s propeller cap EnergoProFin listed in EcoAction Program
15:02 ICTSI's Matadi Gateway Terminal unlocks shipping system benefits
14:40 2nd conference on transportation of dangerous cargoes to address application of IMDG Code and ADR Agreement in Russia
14:02 Havyard to deliver ship design for further two cargo vessels for Royal Arctic Line
13:33 Ecochlor announces BWMS retrofit contract with Alaskan Tanker Company
13:02 GTT notified by Samsung Heavy Industries for the tank design of a new LNG carrier for Navigare
12:30 Gas4Sea partners and Equinor signed an LNG bunkering agreement
12:24 Social allocations of Multipurpose Reloading Complex grew by 22% YoY to RUB 3.8 million in 2018
12:01 Rail traffic at the Port of Gothenburg up to 398,000 TEUs in 2018
11:43 International best practices are introduced at ASCO to protect sailors health
11:41 Port of Hamburg sets record for seaport-hinterland rail traffic in 2018
11:39 IMO’s Sub-Committee on Pollution Prevention and Response meets this week
11:18 Concordia Damen celebrates naming of innovative Sendo Liner
11:15 ASCO hosted a training course for instructors
10:47 24 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 18-19
10:22 ABP bolsters business with paper company joining Port of Hull
09:58 Brent Crude futures price is down 0.42% to $66.22, Light Sweet Crude – down 0.38% to $56.19
09:40 BIMCO demands 4th IMO GHG Study based on realistic economic growth
09:19 Baltic Dry Index is up to 643 points

2019 February 18

18:06 Algoma announces the Algoma Conveyor is headed for Canada
17:36 Maersk Line announces rates from Mediterranean to West and Central Asia
17:06 CMA CGM announces FAK rates from ISC to North Europe and the Mediterranean
16:41 MAN Energy Solutions launches new TCT turbocharger series
16:26 VSC receives positive conclusion of state environmental expertise
16:02 Herbert-ABS releases HECSTAB Offshore
15:31 PPR 6 preview: IBIA working for sensible 2020 solutions at IMO meeting
15:02 Suez Canal extends its dry bulk vessels tolls reduction
14:43 Gazprom and Almaz-Antey Corporation sign contract for batch manufacturing of subsea production equipment
14:20 Average wholesale prices for М-100 HFO up to RUB 15,842 in RF spot market
14:02 MOL Chemical Tankers acquires 20% share of Dutch tank container company Den Hartogh
13:39 2nd Hydraulic Engineering Structures and Dredging Congress to gather over 200 Russian and foreign participants
13:15 ONE unveils enhanced intra-Asia Japan service network for 2019
12:51 Nakhodka Trade Sea Port and Damen sign contract on delivery of tug by summer 2019
12:18 33 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 17-18
11:53 World Maritime University signs MoU with Jordan Academy for Maritime Studies
11:30 Coastal fish assessments to continue in Baltic Sea with renewed HELCOM project
11:07 Fincantieri starts dry dock works on ultra-luxury cruise ship "Silver Moon"
10:55 Finnpilot Pilotage amendments its service terms during validity of winter assistance restrictions
10:26 ASCO is interested in cooperation with prominent shipping companies
10:07 Diana Shipping announces the sale of two Panamax dry bulk vessels and time charter contracts for m/v Crystalia and m/v Maera with Glencore
09:40 Brent Crude futures price is up 0.17% to $66.36, Light Sweet Crude – up 0.45% to $56.23
09:21 Baltic Dry Index is up to 639 points
09:07 Panama Canal Board of Directors appoints new Canal Administrator and Deputy Administrator
08:07 IMO conducts training course to enhance maritime security in Kenya
07:32 Valencia hosts first internal technical meeting of European project “H2PORTS - Implementing Fuel Cells and Hydrogen Technologies in Ports”

2019 February 17

16:59 Coast Guard responds to vessel fire near Rockport, Texas
15:09 Kleven Shipyard delivers to Maersk the AHTS Maersk Maker
14:33 Danube high-speed low-wash ferry offers new level of efficiency and reliability
13:21 Interorient Marine Services Ltd. convicted and sentenced for oil discharge
12:39 USCG assists in rescue of five people from sunken vessel near Dutch Harbor
11:01 European ports welcome agreement on the European Maritime Single Window environment

2019 February 16

16:15 Ribbon-cutting kicks off ICTSI´s Batumi terminal expansion project
14:42 Höegh’s RoRo solution chosen for 112MT Transformer shipment