MABUX: Bunker Market this morning, March 25
The Bunker Review was contributed by Marine Bunker Exchange
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) declined on Mar. 22
380 HSFO - USD/MT 419.21 (-2.72)
180 HSFO - USD/MT 468.29 (-1.85)
MGO - USD/MT 636.93 (-2.00)
Meantime, world oil indexes demonstrated downward changes on Mar. 22 shifted to a lack of progress in U.S.-China trade talks and fears of a slowdown in the global economy and oil demand.
Brent for May settlement decreased by $0.83 to $67.03 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for May delivery fell by $0.94 to $59.04 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 7.99 to WTI. Gasoil for April delivery decreased by $13.00.
Today oil indexes continue to fall amid concerns of a broadening global economic slowdown which could threaten demand for crude.
Concerns about a potential U.S. recession resurfaced late last week after remarks by the U.S. Federal Reserve, with a 10-year treasury rate for the first time since 2007. Market sentiment was further dampened following the appearance of an inverted yield curve - a powerful tool that suggested a potential recession might be near. The last time the spread between the 3-month Treasury bill and the 10-year note went negative was in 2006, right before the economic downturn that began in the next year.
Oil prices has risen by more than 20 percent since the beginning of January, due to supply cuts by the Organization of the Petroleum Exporting Countries and allies, such as Russia, and U.S. sanctions on Iran and Venezuela.
The U.S. dollar climbed against the euro on March,22 to its highest in more than a week. A strong dollar makes oil more expensive for holders of other currencies.
Market is also waiting for the trade talks between the U.S. and China, as U.S. Treasury Secretary Steven Mnuchin and other members of the Trump administration head to Beijing this week for another round of trade discussions. Trade negotiations with China were progressing and a final agreement “will probably happen,” U.S. President Donald Trump said on March,22.
A jump of more than 2 million barrels per day in U.S. crude oil production since early 2018 to a record 12.1 million bpd has made the United States the world’s biggest producer, ahead of Russia and Saudi Arabia. This has resulted in increasing exports, which have doubled over the past year to more than 3 million bpd. The International Energy Agency estimated that the United States would become a net crude oil exporter by 2021. U.S. oil rig count data showed an 11-month low - oil rigs fell by nine this week, their fifth-straight week of declines, to 824, the lowest since April 2018. U.S. oil drilling has continued to slide lately, despite crude prices rising by a third this year.
We expect bunker prices to demonstrate downward changes today: USD 4-6 down for IFO, USD 8-10 down for MGO.