2020 December 14 09:58
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) increased on December 11:
380 HSFO: USD/MT 335.15 (+4.66)
VLSFO: USD/MT 413.00 (+7.00)
MGO: USD/MT 475.83 (+8.21)
Correlation between the Market Bunker Price Index (MBP) vs MABUX Digital Bunker Price Index (DBP) in four major hubs on Dec.11 still showed overcharging of VLSFO bunker grades in all selected ports. At the same time, 380 HSFO is overcharged in Fujairah and Houston, while it is undercharged in Rotterdam (-16 USD) and Singapore (-3 USD). MGO LS remained undervalued in all ports except of Houston (+ 21 USD).
Meantime, world oil indexes decreased on Dec.11.
Brent for February settlement decreased by $0.28 to $49.97 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January fell by $0.21 to $46.57 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.40 to WTI. Gasoil for January delivery lost $6.25.
Today oil indexes increase buoyed by hopes that a rollout of coronavirus vaccines will lift global fuel demand.
The U.S. Food and Drug Administration (FDA) granted emergency use authorization to BNT162b2, the COVID-19 vaccine co-developed by Pfizer and BioNTech SE on Dec. 11. The approval will see the first U.S. deliveries of BNT162b2 later in the day, and lifted hopes that the world’s largest oil consumer will see a decrease in the number of COVID-19 cases, lift restrictions and increase demand.
Over the last week there were some signs of a pickup in European demand as the continent’s struggle with Covid-19 started to reap rewards of lower caseloads and slightly more relaxed restrictions on businesses and households. Even so, the situation remains volatile, with France on Dec.10 extending its night-time curfew over the New Year period and the U.K. edging nearer to putting the capital, London, under the most restrictive of its bands. Also Germany announced the implementation of stricter restrictions beginning on Wednesday. In the U.S. meanwhile, the Department of Homeland Security said it will extend restrictions on non-essential travel across the border with Mexico and Canada through January 21.
However, the global market is likely to remain oversupplied in the first quarter of next year, as the pandemic continues to plague northern hemisphere markets. It remains unclear as to whether the recovery in prices will feed through into higher U.S. output next year, given the sharp tightening of access to capital for much of the shale patch. Light U.S. oil is also particularly affected by the return of Libyan crude, which has largely displaced it from European markets as the North African country has brought back over 1 million barrels a day of production in the wake of a peace accord.
Baker Hughes on Dec.11 reported that the number of U.S active oil rigs rose by 12 to 258 last week. That followed increases in each of the last two weeks. The total active U.S. rig count was also up by 15 to 338.
We expect bunker prices may demonstrate slight downward changes today: 1-3 USD down for IFO and 4-6 USD down for MGO.