MABUX: Bunker market this morning, Dec 12
The Bunker Review was contributed by Marine Bunker Exchange (MABUX)
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) demonstrated irregular changes on Dec.11:
380 HSFO - USD/MT - 356.46(+4.75)
180 HSFO - USD/MT – 397.33(+3.85)
MGO - USD/MT – 669.24(-0.31)
Meantime, world oil indexes declined on Dec.11 after industry data showed an unexpected build in U.S. crude inventories and as investors waited for news on whether a fresh round of U.S. tariffs on Chinese goods would take effect on Sunday.
Brent for February settlement decreased by $0.62 to $63.72 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January fell by 0.48 to $58.76 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $4.96 to WTI. Gasoil for December delivery decreased $11.25.
Today morning oil indexes rise slightly as OPEC forecast a supply deficit next year, from doom and gloom over data showing a surprise increase in U.S. crude inventories.
According to the U.S. Energy Information Administration data, Crude inventories rose by 822,000 last week. The market was looking for a drawdown of 2.76 million barrels, according to the forecasts. Gasoline inventories soared by 5.4 million barrels, compared with expectations for a rise of about 2.5 million barrels. That was the largest weekly build in gasoline since January, according to EIA records. Distillate inventories, meanwhile, climbed by 4.1 million barrels, versus forecasts for a build of about 1.6 million barrels.
U.S.-China trade tensions continue to cloud the outlook for demand, with a Dec. 15 deadline for the next round of U.S. tariffs on Chinese imports approaching fast.
The United States is to become a net exporter of crude and fuel for the first time on record on an annual basis in 2020 due to a production surge that has dramatically reduced its dependence on foreign oil. Also U.S. producers Exxon Mobil Corp and Hess Corp plan to export the first-ever shipments of crude oil from Guyana between January and February.
OPEC on Wednesday pointed to a small deficit in the oil market next year due to restraint by Saudi Arabia even before the latest supply pact with other producers takes effect, suggesting a tighter market than previously thought. In a monthly report, OPEC said demand for its crude will average 29.58 million barrels per day (bpd) next year. OPEC pumped less oil in November than the average 2020 requirement, having in previous months supplied more. At the same time OPEC kept its 2020 economic oil demand growth forecasts steady, and was more upbeat about the outlook. The report also showed OPEC production falling even before the deal takes effect. In November, OPEC output fell by 193,000 bpd to 29.55 million bpd, according to figures the group collects from secondary sources, as Saudi Arabia cut supply.
Elsewhere, Venezuela’s crude output in November jumped more than 20% from the prior month to the highest level since the United States tightened sanctions on state oil company PDVSA in August, two people with knowledge of PDVSA data said this week.
Investors are also eyeing other major events this week including the British election on Thursday and U.S. and European Central Bank meetings.
We expect bunker prices to decline today: 1-3 USD down for IFO, 7-10 USD down for MGO.