MABUX: Bunker market this morning, Dec 17
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 in the main world hubs) rose slightly on December 16:
380 HSFO: USD/MT 338.06 (+1.99)
VLSFO: USD/MT 417.00 (+2.00)
MGO: USD/MT 480.94 (+2.98)
Correlation of the MBP Index (Market Bunker Prices) vs the DBP Index (MABUX Digital Bunker Prices) in four largest hubs showed on Dec. 16 that 380 HSFO fuel was still undervalued in Rotterdam by 10 USD while two Indexes were equal in value in Singapore. 380 HSFO remained overpriced in Fujairah and Houston (plus 7 USD and 25 USD, respectively). Besides, for the first time it was registered the underestimation of VLSFO fuel in Singapore (minus 2 USD). In all other selected ports, VLSFO remains moderately overpriced. MGO LS, in turn, was undervalued in all ports ranging from minus 17 USD to minus 45 USD, with the exception of Houston (was still overvalued by 12 USD).
World oil indexes changed irregular on Dec.16 amid U.S. crude inventories report and tighter coronavirus lockdowns in Europe.
Brent for February settlement rose by $0.32 to $51.08 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January delivery increased by $0.20 to $47.82 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.26 to WTI. Gasoil for January delivery lost $1.00 – $418.75.
Today morning oil indexes demonstrate slight upward evolution.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.1 million barrels from the previous week. At 500.1 million barrels, U.S. crude oil inventories are about 10% above the five year average for this time of year. Forecasts had expected the EIA to report a 3.5-million-barrel decline in crude oil inventories for the week to December 11, after it estimated a huge build of over 15 million barrels for the previous week.
Goldman Sachs predicts structural underinvestment in oil and gas will put upward pressure on oil prices. The underinvestment may stimulate short-term demand for oil, so it can rise over the next few years as so-called green infrastructure is being built. Afterward, as this infrastructure starts operating, there will be a negative impact on oil demand and, likely, prices.
OPEC said the OPEC+ group of producers must continue to calibrate the easing of its collective oil production cuts to the still fragile global oil demand in the pandemic. Earlier this month, the OPEC+ group managed to avoid a no-deal outcome at its meetings: the producers in the pact are set to increase production by no more than 500,000 bpd each month through April 2021. The next meetings of the Joint Technical Committee (JTC) and the Joint Ministerial Monitoring Committee (JMMC), originally scheduled for this week, have been pushed to early January, ahead of the next ministerial meeting on January 4.
Spot LNG prices in Asia – JKM – fell below $2/MMBtu earlier this year, but have recently spiked as demand picks up. Prices spiked above $12/MMBtu.
We expect IFO bunker prices may add 1-3 USD today while MGO prices may change irregular in a range of plus-minus 1-4 USD.
