• 2017 April 21 15:09

    World's bunker market still in waiting mood, expert says

    The Bunker Review is contributed by Marine Bunker Exchange

    The Easter holiday break shut many markets for as long as four days this week and so has not given any chance for world fuel indexes to set up the firm trend: they were changing insignificant and irregular. Still the speculation that the Organization of Petroleum Exporting Countries and its allies will extend their six-month pact aimed at eroding a global glut is helping boost prices, while there is also concern that rising U.S. output will counter the reductions.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) has decreased slightly in the period of Apr. 13 – Apr. 20:

    380 HSFO - down from 306.36 to 299.21 USD/MT (-7.15)
    180 HSFO - down from 347.07 to 339.14 USD/MT (-7.93)
    MGO         - down from 527.14  to 519.28 USD/MT (-7.86)


    One of the main geopolitical worries for global fuel market is still Syria and possi-ble cancellation by Russia of its cooperation with the U.S. (and others) with regards to operational security in the area. The risk of a military confrontation between the different armed players in the conflict has increased. Several NATO countries, such as Belgium, have already postponed further air force operations in Syria.

    At the same time, the Arab countries also don’t seem to be totally supporting the U.S. attack on Syria. Iraq indicated its worries while the region’s leading military and political power, Egypt, has openly criticized the military action. This in stark contrast to most of the countries from Gulf Cooperation Council (Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman).

    In the short term, the global oil market might not feel an effect of the actions in Syria. Syria’s position as an oil and gas producer is negligible. Since the start of the fights against Assad no real effects on global oil markets have been shown. Syria only produced around 25,000-33,000 bpd in 2014-2015. The future impact, however, could be rather strong, especially if there is a spill-over of the civil war to Jordan, Saudi Arabia, or Iraq.

    The IEA said in its latest report that the oil market is probably already balanced, although more data is needed. Oil inventories are falling in many parts of the world and have started to decline in the OECD as well. As per report, oil stocks in the Organisa-tion for Economic Cooperation and Development industrialized countries fell by 17.2 million barrels in March, although inventories were still 300 million barrels above the five-year average. In the coming months, it is expected that more substantial inventory declines will arrive and demonstrate that the oil market is no longer oversupplied. At the same time, the IEA downgraded its oil demand growth estimate for this year from 1.4 mb/d to 1.3 mb/d.

    Goldman Sachs in turn maintains its projection that oil prices will remain stable due to improvements in drilling technology that can keep a lid on prices. The invest-ment bank says that shale will also limit volatility and offers a five-year estimate on WTI at $54 per barrel.

    OPEC members Saudi Arabia, Iraq and Kuwait are reportedly targeting $60 per barrel: at that price level, government finances would stabilize while it would still be low enough to prevent a resurgence of U.S. shale. However, the risk is that OPEC is underestimating the ability of shale to ramp up. Indeed U.S. shale output is already rebounding. Nevertheless, the plans from OPEC to reach $60 per barrel raise chances for an extension of the collective production cuts.

    Iran, which has been exempted from the OPEC oil production cut agreement closed last November, said it is now ready to join the initiative as long as there is consensus among the cartel’s members. The remarks suggest that Iran has reached an oil output level that it is comfortable with for the time being. There are not, howev-er, any details as to how much Iran would be willing to cut off its daily output or from what monthly production level the cut will be effected. Iran produced 3.79 million barrels daily last month, down slightly from the 3.82 million bpd in February but higher than the 3.78 million barrels in January.

    U.S. crude production will likely rise in the months ahead as explorers added rigs for a 13th week, capping the longest stretch of gains since 2011 and pushing fuel prices down. Rigs targeting crude rose by 11 to 683 last week, the highest level since April 2015. The number of wells drilled has more than doubled since tumbling to 316 in May.

    China reported a 6.9 percent annual growth rate in the first quarter, much better than expected. It is also setting new oil import records by the month, dispelling fears that crude oil demand was slowing down. Imports hit a record high 9.21 million bar-rels per day in March, an increase of 11 percent from February. That spike is likely temporary, but China no longer appears to be the downside risk to oil prices at the moment.

    Global fuel market is in a waiting mood so far. The next steps for fuel prices de-pend largely on geopolitical factors: Syria and Korean peninsula, as well as on OPEC’s further decisions. The volatility on the market remains, and bunker prices may change irregular 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 April 28

18:20 SCF Group recognized at 2016 Marine Money awards for USD 750-million Eurobond issue
18:11 ABP Humber appoints Chris Bowlas as new Head of Commercial
18:01 Kiel Ostuferhafen expansion enters fifth phase
17:58 Norwegian Сruise Line takes delivery of first purpose-built ship for China
17:50 Bunker prices sink at the port of Novorossiysk, Russia (graph)
17:27 Ships of RF Navy’s Pacific Fleet take part in exercises
17:03 Container Terminal Saint-Petersburg handled 157,600 TEUs in QI’2017, up 7.8% Y-o-Y
16:42 Skangas wins framework agreement for LNG supply
16:18 FESCO opens Kuntsevo-2 to refrigerated containers
16:00 Throughput of Taganrog Commercial Sea Port up 38% to 320,000 t in QI’2017
15:34 Throughput of Multipurpose Reloading Complex (Ust-Luga) up 30% to 1.28 mln t in QI’2017
15:10 Tuco presents new light dive boat - LDV Light Diving Vessel
14:51 IMO arranged a series of national workshops focused on biofouling
14:35 Multipurpose Reloading Complex (Ust-Luga) increased financing of its development programme by 41%
14:12 Gazprom posts IFRS net profit of RUB 951.6 bln in 2016 (up 21%, year-on-year)
13:47 Training course aimed at assessment of seafarer competence is being held in Shanghai
13:23 Andrei Iovlev appointed as Harbour Master of Rostov-on-Don port (photo)
12:59 Throughput of Tuapse Commercial Seaport up 1.5% to 4.24 mln t in QI’2017
12:28 Throughput of Sea Port of Saint-Petersburg up 4.6% to 1.8 mln t in QI’2017
12:01 Keppel Shipyard to deliver twelfth FPSO to BW Offshore
11:44 Volga-Baltic transit to be opened from April 30
11:36 Maersk Line and Hamburg Süd sale and purchase agreement approved
10:57 Roman Chesnokov appointed as head of Administration of IWW's Ob-Irtysh Basin
10:25 Vympel Shipyard launches yet another Grachonok-class boat of Project 21980 (photo)
10:02 Kiel Ostuferhafen expansion enters fifth phase
09:39 Baltic Dry Index up to 1,134 points
09:18 Indicative bunker prices go down at the port of Saint-Petersburg, Russia (graph)

2017 April 27

18:41 MacGregor divests Woodfield Systems
18:04 ABS awarded the Offshore & Marine Engineering Award
17:58 IMO joined the 3rd Pacific Regional Energy and Transport Ministerial Meeting
17:40 DHT Holdings announces receipt of unimproved proposal from Frontline
17:35 AIDAdiva kicks off the cruise season in Rostock-Warnemünde
17:20 IMO’s Legal Committee is expected to consider adopting a resolution to encourage ratification and implementation of 2010 HNS Convention
17:04 Swire Pacific Offshore wins Excellence in Manpower Training and Development award
16:49 Rasul Sultanov appointed as Chairman of Astrakhan Region Government (photo)
16:34 Bentec enters the substantial North American oilfield equipment market
16:18 SCF Group recognized at 2016 Marine Money awards for USD 750-million Eurobond issue
16:04 Seabourn and ACTA announce Corporate Partnership agreement through 2017
15:58 Record number of cruise passengers spend 63 million euro in Stockholm
15:41 Hyundai Heavy Industries posts profits of 618.7 bln won for 1Q 2017
15:40 AIDA Cruises takes delivery of AIDAperla in Nagasaki from Mitshubishi Heavy Industries
15:30 Keppel FloaTEC secures engineering and construction support services contract for first Tension Leg Wellhead Production Platform in Vietnam
15:04 Deltamarin’s bulk carrier design shortlisted for Nor-Shipping Awards
15:04 Prosafe awarded Johan Sverdrup contract
14:41 IMO Secretary-General speaks at the 1st Assembly of the International Hydrographic Organization
14:18 IMO attended International Forum on Seafarers' Education, Training & Crewing
13:57 Record number of visitors at Intermodal Asia 2017
13:52 Global bunker market: the volatility remains, expert says
13:29 NOVATEK and Rosneft confirm plans on implementation of projects in Murmansk Region – Marina Kovtun
13:02 ShipRight FastTrack(FT) enables ship designers to cope with the demand for increased FE Analysis scope
12:37 MAN Diesel & Turbo presents new high-pressure SCR for two-stroke engines
12:16 DP World reports 5.7% gross volume growth in first quarter of 2017
12:13 Bunker prices are flat staying high at the Far East ports of Russia (graph)
11:50 RF Transport Ministry suggests NSRA reorganization and authorization for additional functions (photo)
11:05 Vitaly Klyuev forecasts up to 50 large ships and 200 service fleet units to operate permanently on NSR in years ahead
10:42 NIBULON’s fleet will be increased significantly
10:18 HH Ferries Group has docked Tycho Brahe for completion of battery conversion
09:56 Brent Crude futures price down 0.42% to $52.19, Light Sweet Crude – down 0.52% to $49.36
09:34 LUKOIL BoD recommended 2016 dividends distribution in the amount of RUB 120 per ordinary share
09:19 Baltic Dry Index down to 1,147 points