MABUX: Bunker market this morning, Aug 11
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 decreased on Aug. 10:
380 HSFO: USD/MT 303.70 (-2.17)
VLSFO: USD/MT 361.00 (-2.00)
MGO: USD/MT 441.23 (-0.21)
Meantime, world oil indexes demonstrated irregular changes on Aug. 10.
Brent for October settlement increased by $0.59 to $44.99 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for September rose by $0.72 to $41.94 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.05 to WTI. Gasoil for August delivery lost $1.25.
Today morning oil indexes increase underpinned by expectations of U.S. stimulus and a rebound in Asian demand as economies reopen.
U.S. lawmakers continued negotiations on the massive virus relief economic package with Treasury Secretary Steven Mnuchin saying there are areas where compromise is possible and a fair deal could be agreed upon. Prices found support after U.S. President Donald Trump tweeted that top congressional Democrats wanted to meet with him on coronavirus-related economic relief. The talks between Democrats and the Trump administration broke down last week.
A weaker U.S. dollar also helped support higher oil prices. After steadying on Aug.10 the dollar was again slipping today, easing 0.1% against a basket of currencies and falling further against riskier currencies like the Australian dollar.
Meanwhile, a recovery in the U.S. is seeing some momentum: new Covid-19 cases have declined by the most since the start of the pandemic and applications for unemployment benefits dropped to a pandemic low.
In a sign of recovering consumption, the quantity of commercial flights around the world rose almost 6% in the seven days to Sunday, according to FlightRadar24 data. The average number of 67,000 planes in the sky was still far below the more than 100,000 pre-Covid. U.S. passenger airline traffic, which was hit hard by the coronavirus pandemic, was down 80% in June from a year earlier, official figures showed, but still nearly twice the levels of May.
At the same time, energy companies have begun taking back millions of barrels of oil from the U.S. government's emergency stockpile after renting storage in the facility to help manage a glut of crude this spring after energy demand collapsed during COVID-19 lockdowns.
Sentiment was also boosted by comments from Saudi Aramco that demand is improving. On Aug.09, Saudi Arabian Aramco CEO Amin Nasser said he sees oil demand rebounding in Asia as economies gradually open up. China's factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, adding to signs of recovery in the world's second-largest economy.
Meanwhile, China’s consumer price index (CPI) rose 2.7% in July from a year earlier, according to data from the National Bureau of Statistics released on Aug.10, suggesting economic activity is picking up. In another sign of recovery, the producer price index (PPI) fell 2.4% from a year earlier, a smaller drop than the 3% fall recorded in June. Both numbers suggest economic activity is picking up in the second largest economy in the world.
We expect bunker prices may demonstrate slight irregular changes today: 1-3 USD up for IFO and 1-3 USD down for MGO.