• 2017 February 16 17:08

    Expert says bunker prices may continue mixed trends next week

    The Bunker Review was contributed to IAA PortNews by Marine Bunker Exchange

    World fuel indexes continued irregular fluctuations this week while market focused on two main drivers: OPEC’s supply-cut deal and rebound in U.S. drilling activity. The IEA increased its 2016 estimates for world oil demand growth for a third month, and boosted its outlook for 2017, anticipating an increase of 1.4 million barrels a day this year. It also predicts that world oil inventories will fall by 600,000 barrels a day during the first half of the year if OPEC sticks to its agreement. While stockpiles in industrialized nations have declined for five months in a row, they still remain significantly above average levels.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) edged up slightly in the period of Feb.09 – Feb.16:
     
    380 HSFO - up from 303.57 to 310.57 USD/MT (+7.00)
    180 HSFO - up from 346.14 to 351.57 USD/MT (+5.43)
    MGO         - up from 529.07 to 530.71 USD/MT (+1.64)


    OPEC cut its crude oil production by 890,000 bpd from December to average 32.14 million bpd in January. Production in January decreased the most in Saudi Arabia, Iraq and the UAE, while production in Nigeria, Libya and Iran increased. The cartel did not provide a compliance rate percentage, but as per different estimations it is around 90-93 percent.

    Secondary sources figures show that Saudi Arabia cut deeper than promised, and reduced output to below 10 million bpd last month, to 9.946 million bpd, down by 496,200 bpd compared to December  (more than the 486,000-bpd-cut it promised in the deal).

    On the other hand, Iraq, Venezuela, Angola and Algeria cut less than promised, while production in Nigeria rose by 101,800 bpd, Libya’s output increased by 64,700 bpd, and Iran’s output rose by 50,200 bpd. Nigeria and Libya were exempt from the cut-deal while Iran was allowed by raise its production slightly, by up to 90,000 bpd.

    The additional cuts of 558,000 bpd promised from non-OPEC countries is a little less clear -  the IEA projects that Russia has slashed output by 100,000 bpd in January. Russia promised to cut 300,000 bpd over the course of the six-month compliance period. Data from other countries is also unclear although the IEA said that Oman appears to have reduced output by 45,000 bpd.

    Russia for its part will decide in April or May on whether to extend the output-cut deal with OPEC. There are signs that country’s output may be falling but that exports remain high, as its producers protect their export markets at the cost of lower domestic supplies. Taken these trends under consideration, OPEC might have to extend its cuts for a longer period than the currently planned first half of 2017.

    Nevertheless, that is a good sign that the oil market is adjusting towards some stage of bal-ance. As per IEA, if OPEC can continue with its high compliance rate, global oil inventories could decline by around 0.6 mb/d on average between January and June.

    The factor of risk is that oil supplies outside and within OPEC may increase in near-term outlook, offsetting the progress made by the OPEC deal. Rising production in Canada, Brazil and the U.S. may transform in additional 750,000 bpd in 2017.

    In the United States rising drilling activity is pushing up production. Drillers added 8 oil rigs in the week to Feb. 10, bringing the total U.S. count to 591, the most since October 2015. During the same week last year, when prices were around $30 per barrel, there were just 439 active oil rigs.

    Besides, some 10 million barrels of crude from the U.S.'s strategic reserve are scheduled to be sold later this month. The shipment is part of a total 25 million barrels, to be sold over a period of three years. It represents less than 2 percent of the strategic reserve’s current capacity, which is calculated at 695.1 million barrels. As such, the sale is unlikely to have a lasting impact on fuel prices, although a brief fluctuation is likely.

    Demand growth from China and India might not be as supportive as 2016. China’s crude imports in January slipped from a record as refiners eased buying before the Lunar New Year break, when industrial activity tends to slow during the country’s most-important holiday.

    India’s monthly oil demand also fell the most since May 2003 adding some pressure on global fuel indexes at the moment. This decline in demand is due to demonetization: Prime Minister Narendra Modi in November withdrew high-value currency notes in a country where almost all consumer payments are in cash. Growth in gross domestic product may slow to 6.5 percent in the year through March from 7.9 percent the previous year.

    The present market situation looks like oil producers will have to cut production more quickly to drain the global oversupply this year while rising production in the United States is undermining OPEC’s efforts to cut oil output. We expect irregular changes in bunker prices will continue next week.

     

     

     

     

     

     

     

    * MGO LS
    All prices stated in USD / Mton
    All time high Brent = $147.50 (July 11, 2008)
    All time high Light crude (WTI) = $147.27 (July 11, 2008)




2017 February 21

14:51 Vyborg Shipyard to deliver second icebreaking support ship intended for Novy Port in May 2017
14:20 Port of London Authority to discuss 20 year growth plan for the Thames river
14:02 CMA CGM announces GRR from India to West Africa
13:41 Bunker prices go down in the Far East ports of Russia (graph)
13:10 New Times Shipbuilding holds naming ceremony for two oil tankers and announces delivery of cargo lake ship
12:55 Yamal major landing ship of RF Navy's Black Sea Fleet returned to Sevastopol from the Mediterranean Sea (photo)
12:39 IAA PortNews offers a photo release from the 4th International Forum of Dredging Companies
12:23 KCA Deutag secures platform drilling contract with Sakhalin Energy
12:10 Intermodal Asia to launch the Industry Leaders Strategy Summit in Shanghai on 21st – 22nd March 2017
11:44 Delivery of icebreaker Ilya Muromets scheduled for autumn – RF Defence Ministry (photo)
11:30 Kelvin Hughes to supply radar systems for the Royal Navy’s latest River-class OPVs
11:16 Allseas Group will build the second string of TurkStream
11:03 De Boer Remorquage SARL orders two custom tugs from Damen
10:42 MHI-MME retrofitted 80 LNG carriers for running on low sulfur fuel
10:24 GTT to equip yet another FSRU with its cryogenic membrane containment system
10:18 Sydney City Marine completes its first maintenance docking of a Damen vessel
10:03 Brent Crude futures price down 0.05% to $56.15, Light Sweet Crude – down 0.41% to $54
09:59 “K” Line (India) becomes member of Indian National Shipowner’s Association
09:45 Baltic Dry Index up to 757 points
09:31 HII Executive VP and General Counsel inducted into Women’s Leadership Institute
09:17 Throughput of NCSP Group in January 2017 up 6.4% to 12.7 mln t

2017 February 20

18:26 ECSA deplores that port and cargo interests condone regional measures
17:59 Sea transport of Sevastopol carried 390,600 passengers in January 2017, down 10%, Y-o-Y
17:31 Period of icebreaker services is over in the Kerch Strait
17:06 Maersk Line increases rates from North Europe to Far East
16:44 USPA to expand range of tenderers for port infrastructure development
16:23 Ships of RF Navy’s Baltic naval base are preparing for a planned combat mission in the sea
16:00 ITF condemns Ukrainian wage slash offer
15:57 Fincantieri and Ferretti announce a cooperation agreement
15:46 Cargo traffic via Nika-Tera terminal (Ukraine) in January 2017 up 2-fold Y-o-Y to 330,500 t
15:20 HH Ferries Group takes visible steps on path to battery operation
14:58 Preparations are underway in New York ahead of June’s UN Oceans Conference
14:35 IMO training in Malaysia has seen port State control officers practice inspecting air pollution and energy efficiency rules
14:12 Icebreaker Voima set out to help vessels in the Gulf of Finland
13:47 Container throughput of port Hong Kong (China) up 3.5% to 1.73 mln TEUs in January 2017
13:23 Average wholesale prices for М-100 HFO down to RUB 11,226 in RF spot market
13:00 Evoqua Water Technologies supports Conference “Implementation of the BWMC in Russia” as its Sponsor
12:39 Port of Singapore throughput up 10% to 50.54 mln t in January 2017
12:36 Hyundai Global Services enters into eco-friendly ship services business with KSS Line
12:21 Newbuilding programme of Krasnoye Sormovo covers a two-year period with cruise liner PV-300 to be laid down in March – USC
11:55 Throughput of port Primorsk up 11% to 5.63 mln t in January 2017
11:48 Fire on Korean fishing vessel at port of Cape Town under control
11:27 Rolls-Royce showcases MTU drive and propulsion solutions for naval vessels at IDEX, NAVDEX 2017
11:02 RF Government signs Decree on expansion of Taman seaport (Krasnodar Territory)
10:58 Swedish Dockworkers Union agrees to call off all industrial action in the Port of Gothenburg
10:40 FAS Russia and container carriers will develop common rules and principles of behavior in shipping market
10:19 Gastops to provide DRA for USCG's offshore patrol cutter
09:57 Brent Crude futures price up 0.20% to $55.91, Light Sweet Crude – up 0.17% to $53.87
09:38 Sredne-Nevsky Shipyard completed first phase of Project R1650 Rondo boat construction (photo)
09:16 Baltic Dry Index down to 741 points

2017 February 19

08:55 Three Gorges Dam congestion caused by annual maintenance and COSCO Shipping Lines’ countermeasures
07:10 Gazprom’s exports to Germany add 37 per cent between February 1 and 15
07:07 Golar LNG coses $402.5 mln of 2.75% convertible senior notes
07:06 Hapag-Lloyd announces General Rate Increase from East Asia to East Coast of South America

2017 February 18

16:35 Boskalis subsidiary VBMS awarded inter-array cabling contract for EnBW Hohe See OWF
16:32 Dryships enters into $200 mln common stock purchase agreement with Kalani Investments
11:31 Color Line and Ulstein sign contract for building the world's largest plug-in hybrid vessel
11:30 Spanish strike actions suspended

2017 February 17

18:14 Throughput of port Vysotsk up 32% to 1.59 mln t in January 2017
17:56 Atomflot says construction of Leader icebreaker should be started in 2021