MABUX: Bunker Market this morning, Sep. 24
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 downward changes on Sep. 23
380 HSFO - USD/MT 448.25 (-3.19)
180 HSFO - USD/MT 485.01 (-3.37)
MGO - USD/MT 680.639 (-1.86)
Meantime, world oil indexes continued irregular changes on Sept.23 following reports that top exporter Saudi Arabia is due to restore oil production as soon as next week, while signs of weakness in Europe’s economy also weighed.
Brent for November settlement increased by $0.49 to $64.77 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for November delivery rose by $0.55 to $58.64 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 6.13 to WTI. Gasoil for October delivery decreased by 5.25.
Today indexes decline as weak manufacturing data from Europe and Japan focused attention on a week outlook for demand, though lingering uncertainty over Saudi supply disruption braked the drop.
Saudi Arabia reported, that has already restored around 75% of crude output lost in the Sept. 14 attack on the Abqaiq processing facility and Kurais oilfield. Tension in the Middle East has escalated since the attack on the Saudi facilities. The Pentagon has ordered additional U.S. troops to be deployed in the Gulf region to strengthen Saudi Arabia's air and missile defenses. European powers - Britain, Germany and France - backed the United States in blaming Iran for the Saudi oil attack, urging Tehran to agree to new talks with world powers on its nuclear and missile programs and regional security issues.
Oil indexes were also pressured by data showing eurozone business growth stalled this month, dragged down by shrinking activity in Germany, where a manufacturing recession deepened unexpectedly.
At the same time there are other supply disruptions in other OPEC producers like Nigeria, Libya and Venezuela.
The market also recovered on the notion that this week’s U.N. general assembly might not produce any outcome that will defuse tensions in the Middle East. The president of Iran Rouhani said that he will unveil a peace plan for the Middle East at the U.N. assembly. But at the same time, Iranian Foreign Minister Javad Zarif reiterated his caution that Iran will resort to an “all-out war” if it is targeted by the United States or Saudi Arabia over the Saudi attack.
Apart from the slowdown in global oil demand resulting from slowing economies and the U.S.-China trade war, another threat to oil demand may be lurking for oil markets over the next few months—China could slow down strategic and commercial inventories stockpiling. China—which singled-handedly has been responsible for more than two thirds of global oil demand growth this year—could start to scale back oil purchases for reserves—strategic or commercial—as it could be nearing its storage capacity.
On Friday, Sept.20, an official at China’s National Energy Administration (NEA) said that Beijing had enough oil in storage to cover 80 days of imports, including crude oil at its Strategic Petroleum Reserve (SPR), storage at oil firms, and commercial stocks. The 80 days of oil coverage is close to the 90 days recommended by the International Energy Agency (IEA), of which China is not a member.
Expect bunker prices to demonstrate slight irregular changes today: 1-3 USD up for IFO, 3-5 USD down for MGO.