MABUX: Bunker market this morning, Nov 05
The Bunker Review was contributed by Marine Bunker Exchange (MABUX)
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO (Gasoil) in the main world hubs) demonstrated upward changes on Nov.04:
380 HSFO: USD/MT 293.39 (+1.99)
VLSFO: USD/MT 339.00 (+2.00)
MGO: USD/MT 403.27 (+2.32)
Meantime, world oil indexes increased on Nov.04 after data showed U.S. crude stockpiles dropped 10 times more than the build expected.
Brent for January settlement increased by $1.52 to $41.23 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for December rose by $1.49 to $39.15 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.08 to WTI. Gasoil for November delivery added $10.75.
Today oil indexes decline as U.S. presidential contender Joe Biden begins to look likely to win the U.S. presidency.
As the U.S. elections begin to draw to a close, it is looking increasingly likely that Democrat Joe Biden will be the next U.S. president. This is seen as a downside for oil, as the Democrats have a stronger focus on renewables and are likely to push an energy agenda more focused in that area. However, the election result is not yet conclusive, and with many battleground states decided by razor-thin margins is likely to be a drawn-out process involving numerous legal challenges. The effect of the U.S. presidency on oil was demonstrated when President Donald Trump announced that he had won. Oil prices jumped 4% on the news, only to drop back once it was established that Trump’s declaration was somewhat premature.
The rise in global COVID-19 cases continues, with Johns Hopkins University data showing 600,000 new daily cases globally, with a total of over 48 million cases registered. The ongoing growth of the coronavirus pandemic is pulling back demand forecasts for the foreseeable future, with a corresponding negative impact on oil prices. More lockdowns could cap oil price gains. Italy, Norway and Hungary have tightened coronavirus curbs, following Britain, France and other countries.
At the same time, the latest crude oil inventories data from the U.S. Energy Information Administration (EIA) supported oil indexes. It showed a surprisingly large drawdown in U.S. crude reserves of 7.998 million barrels, as against a forecast draw of 890,000 barrels. This follows crude oil stocks data from the American Petroleum Institute that also presented a large unexpected draw of 8.01 million barrels against a forecast fall of 600,000 barrels. Three of the previous five weeks have shown a draw-down in inventory. Oil production for the previous week also fell - by 600,000 barrels. Both events appeared to be a consequence of Hurricane Zeta.
The possibility, that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group led by Russia and known as OPEC+, maintaining current production restrictions also supported oil indexes yesterday. OPEC member Algeria came out in support of deferring a planned increase in OPEC+ oil output from January, a day after Russia’s energy minister raised the possibility with the country’s oil companies. OPEC+ is scheduled to meet over Nov. 30 and Dec. 1 to set policy.
We expect bunker prices may rise today: 7-9 USD up for IFO and 8-10 USD up for MGO.
