• 2017 July 13 16:07

    World's bunker market in a state of uncertainty

    The Bunker Review is contributed by Marine Bunker Exchange

    World fuel indexes have demonstrated slight downward evolution during the week with no real firm trend. The prices are still been pressured by evidences of an ongoing fuel glut despite efforts led by OPEC to tighten the market by holding back production. U.S. shale production continues to rise; inventories remain elevated; and the markets are concerned that the OPEC cuts are not doing enough to drain the surplus.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) has been steady in the period of Jul. 06 – Jul. 13:

    380 HSFO - down from 287.57 to 286.50 USD/MT (-1.07)
    180 HSFO - down from 328.43 to 327.57 USD/MT (-0.86)
    MGO         - down from 478.50 to 476.79  USD/MT (-1.71)


    The group of world leading banks gave rather controversial forecasts of a further trend in oil prices. BNP Paribas slashed its forecasts for Brent by $9 to $51 a barrel for 2017 and by $15 to $48 for 2018. Barclays also cut its 2017 and 2018 Brent forecasts to $52 a barrel for both years from $55 and $57 respectively.

    Contrariwise, Citigroup expects crude oil prices could rise to US$60 a barrel by this year’s end supporting by growing demand and lower OPEC supply. The IEA also forecast a rise in oil demand this year: it may grow by an average 1.3 million bpd, accelerating from the 900,000 bpd in the first quarter. Production (the IEA’s estimation) was lagging behind demand at 96.69 million bpd in May. These reports suggest at least partial consensus that global oil demand is growing faster than production.

    However, the market still remains doubtful that OPEC-led production cuts will clear a global glut effectively as Russia and Saudi Arabia appear to be less committed than earlier in the year. It seems that Russia may oppose any attempts to deepen the oil production cuts as it may give the impression that OPEC and its partners in the deal are uncertain about its effectiveness in reducing global supplies. In such a case a deeper cut might pressure prices further instead of supporting them. There are some evidences that Russia is also against any further extension of the deal because such an extension will only make oil markets more volatile after it expires, when everyone returns to their normal output rates.

    Saudi Arabia in turn plans to export less: it is planned to cut shipments in August by more than 600,000 bpd, taking exports for that month to their lowest level this year, to balance a seasonal rise in domestic use. Besides, Saudi Ara-bia cut exports to the U.S. last month in an attempt to force USA to begin using oil from its large inventories, which prevent large crude orders from international mar-kets. However, the initiative ultimately failed when Iraq, OPEC’s No. 2 oil producer, began selling its heavy crude to American buyers as a substitute for Saudi Arabian grades.

    Anyway, no further oil output cuts are expected for the July meeting of the ministerial committee set up to monitor compliance with the OPEC-non-OPEC deal. The meeting will take place on July 24 in Russia.

    In this situation OPEC is thinking of putting a ceiling on the crude oil outputs of Libya and Nigeria, as rising production from these two OPEC producers exempt from the cuts is further complicating the cartel’s efforts to draw down oversupply. Nigeria’s crude oil production increased to 1.68 million bpd in May, up by 174,200 bpd over April—the highest level in more than a year—after the restart of Forcados loadings for the first time since October 2016. Libya, for its part, is reaching a 1-million-bpd production—the highest in four years—and in line with its target to have that output reached by the end of July. Militancy, attacks on oil infrastructure, and port terminals blockades have quieted in both African countries, therefore further increases in production are likely. However, the geopolitical uncertainty could quickly cut production levels once again.

    The diplomatic crisis in the Middle East continues. The four Arab states that are leading the boycott against Qatar vowed on Jul.07 to take new political, economic and legal measures and procedures after Doha rejected in full the list of ultimatums. The Suez Canal Authority—one of the busiest waterways in the world—said on Jul.07 that the canal authorities cannot ban Qatari ships from passing through the canal because of international treaties. But Qatari ships will be barred from using Egyptian ports and the economic zone in the canal.

    U.S. drillers went back to adding rigs last week: plus 7, marking a 24th week of increases out of the last 25 and bringing the total count up to 763, the most since April 2015. Although the EIA reported drawdowns in inventories, it also reported a rebound in production figures, dashing hopes that output was on the decline. As of today, U.S. oil production has risen over 10 percent since mid-2016 to 9.34 million barrels per day (bpd).

    PIRA Energy has predicted that U.S. crude oil exports will top 2 million barrels by 2020, reaching 2.25 million bpd. That’s more than what most OPEC members export. As of 2016, the U.S. average daily export rate was just 520,000 bpd, although in May, the average daily was 1.02 million barrels. Canada was the biggest market of U.S. crude exports, taking in 372,000 bpd, oil exports to China stood at 147,000 bpd, and U.S. crude exports to the Netherlands (number 3 in a line) came in at 108,000 bpd.

    All in all market conditions remain weak. While further upside could be expected in the short term amid the speculations of a cut in U.S production, gains may still be limited by the firm oversupply dynamics. We do not expect any drastic changes next week: bunker prices may continue swinging with no firm trend.



     

     

     

     

     

     

    * 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)




2018 January 17

14:03 SBM Offshore completes Turritella handover and transaction
13:25 Throughput of port Kavkaz up 40% to 44.293 mln t in 2017
13:08 OOCL christens the last in latest series of ‘G-Class’ containerships
12:54 Yevgeny Zagorodny steps down as Vice-President of United Shipbuilding Corporation
12:26 Coal exports via Rosterminalugol terminal hit 1 mln t milestone this year (photo)
12:01 The Port of Helsinki takes the top spot among European passenger ports
11:22 De Boer/Dutch Dredging and Iskes Towage take delivery of ASD 2310 SD at Damen Shipyards Hardinxveld
10:43 Port of Gdansk throughput up 9% to 40.6 mln t in 2017
10:19 Brent Crude futures price down 0.1% to $69.08, Light Sweet Crude – down 0.11% to $63.66
10:00 NOVATEK’s hydrocarbons production in 2017 totaled 513.3 mln boe, down 6.2% Y-o-Y
09:37 Bunker prices are flat at the Port of Saint-Petersburg, Russia (graph)
09:15 Baltic Dry Index down to 1,221 points
09:08 Hamburg Süd honored twice for sustainability
08:14 COSCO's container ship to receive cyber enabled ship descriptive note ‘Cyber AL3 SECURE PERFORM (Energy Management System)’

2018 January 16

18:21 Kommer Damen opens Damen Area Support China
18:08 DNV GL approves latest Kongsberg Digital Engine Room Simulators
17:49 Russian Railways: Loading of Russia’s export cargo bound for domestic ports up 6.4% Y-o-Y to 293.4 mln t in 2017
17:26 State stevedores of Ukraine handled 34.73 mln t of cargo in 2017, down 9.6% Y-o-Y
17:00 Andrey Lavrishchev’s report at Hydraulic Engineering Structures and Dredging Congress will focus on promising port projects
16:35 Installation of Belgian topside for offshore substation marks milestone in further construction of Merkur Offshore Wind Farm
16:04 Maersk Line announces increase in FAK rates from Northern Europe to Middle East and ISC and from Mediterranean to Far East
15:52 Jotun Paints congratulates North-Western Shipping Company on its 95th anniversary!
15:34 DNV GL launches new JDP to test biodegradable lubricants
15:04 TTS Group ASA secures contract with Cosco (Dalian) Shipyard for TTS cranes
14:45 New Delhi will host 5th edition of Oil Spill India Conference on 5-6 July 2018
14:29 Norwegian Control Systems delivers automation and bridge control systems to five Fjord1 ferries
14:10 Port Mechel Temryuk hanlded 1.5 mln t of cargo in 2017, up 6% Y-o-Y (photo)
13:37 Russia's crude exports in 2017 rise 7%, year-on-year, to 256.718 million tonnes
13:13 Turnover of DeloPorts’ terminals in 2017 up 28% Y-o-Y to 7.7 mln t
12:49 NSR cargo traffic in 2017 included 9.73 mln t carried by seagoing vessels and 797,190 t carried by river ships
12:28 Singapore will host 22nd HR & Crew Management Conference on 16-17 May, 2018
11:56 Three vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on Jan 15-16
11:34 Bunker prices are flat at the Far East ports of Russia (graph)
11:11 Coal exports from Russia rose 4% to 185.136 million tonnes in 2017
10:50 Oceanographic vessel Admiral Vladimirsky starts research in Indian Ocean
10:25 Brent Crude futures price down 0.4% to $69.98, Light Sweet Crude – up 0.31% to $64.5
10:07 CMA CGM announces FAK rates from ISC to North Europe and the Mediterranean
09:42 Cargo turnover at inland water ways of Azov-Don Basin down 4.9% to 9.796 mln t in 2017
09:19 Baltic Dry Index down to 1,264 points
09:07 Vroon’s VOS Stone mobilised with Ampelmann A400 gangway system
08:37 MMC First Process involved in the world’s first wellboat simulator
07:03 Crowley announces plans to build new 100,000-barrel Alaska Class ATB

2018 January 15

18:06 The largest hydraulic crane in the world at Vuosaari Harbour
17:29 Port of Tallinn offers Video Guides for car and truck drivers
17:06 Number of sea-going vessels entered the port of Rotterdam up to 29,646 in 2017
16:47 Construction begins on “Crystal Endeavor” at MV WERFTEN
16:43 Throughput of port Taganrog up 29.8% 3,067,100 t in 2017
16:35 QuantiServ introduces robotised laser technology that drastically increases the lifespan of 2-stroke engine pistons
16:16 Ice navigation restrictions at port Vysotsk (Leningrad Region) come into effect from January 29
15:51 Yevgeny Savkin appointed as Director General of Commercial Sea Port of Ust-Luga (photo)
15:27 Three vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on Jan 14-15
15:04 Port of Kiel throughput up 14.3% to 7,407.376 tons in 2017
14:30 Grain transshipment via Russian ports showed highest growth in 2017 among other cargoes, followed by coal and coke
14:02 Crossing of 278 vessel the Suez Canal of tonnage 16.9 million ton during 6 days
13:48 Dry cargo carrier of Project 964, Kalevala, converted for grain transportation (photo)
13:23 Average wholesale prices for М-100 HFO down to RUB 13,037 in RF spot market
13:02 MOL announces full acquisition and name change of Azalea Maritime B.V.
12:41 Egyptian Government targets 5.7 milliard dollars Suez Canal revenues by end of fiscal year
12:05 Adani inaugurates two Royal IHC Beagle TSHDs
11:57 ZIM appoints a Chief Digital Officer