• 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)




2017 November 17

18:06 Swiber's subsidiary placed into bankruptcy by the District Court of Helsinki
17:55 Pacific Fleet warships arrive in Chuk Samet port, Thailand
17:36 Damen supports team AkzoNobel in the Volvo Ocean Race 2017-18
17:20 Sevmash floated out nuclear-powered missile submarine Knyaz Vladimir (photo)
17:06 CMA CGM announces FAK rates from Asia to North Europe
16:45 Yantar Shipyard launches first trawler of Project SK-3101R for Kamchatka fishing company (photo)
16:26 DNV GL: Standardisation can help enable the digital transformation of shipping
16:00 Maersk Line appoints new president in North America
15:58 Onezhsky shipyard lays down Yury Maslyukov dredger of Damen TSHD 2000 design (photo)
15:26 IMO runs cooperation for oil spill preparedness in west, central and southern Africa
15:00 Special tactical exercises held at CPC Marine Terminal Tank Farm facilities
14:37 Water Transport newspaper will celebrate its centenary in 2018
14:02 NCC conducts yet another groundbreaking ceremony at the Port of Gothenburg Logistics Park
13:45 MSCC Bronka set to increase its heavy cargo transshipment capacity
13:32 Diana Shipping announces time charter contract for m/v Naias with Phaethon
13:14 Vostochny Port extends its collective labor contract for three years
13:02 Acta Marine's walk-to-work construction support vessel in final construction phase
12:30 Scottish Ports Group call for right infrastructure and planning conditions
12:01 Aker Solutions to provide umbilicals for three offshore Norway field developments
11:53 MOL's newbuilding coal carrier NAGARA MARU to serve JERA Trading
11:17 301 ships loaded with export coal left Rosterminalugol this year (photo)
10:53 Icebreaker Moskva set sail for seaport Sabetta (photo)
10:30 Brent Crude futures price down 0.29% to $61.18, Light Sweet Crude – up 0.24% to $55.27
10:08 ABS raises cyber awareness to marine insurance industry
09:45 Bunker prices go down at the Port of Saint-Petersburg, Russia (graph)
09:21 Baltic Dry Index down to 1,361 points
09:08 ESPO welcomes the agreement between Parliament and Council setting a deadline for global solution on CO2 from shipping
08:29 Port of Long Beach receives U.S. EPA Grant to cut pollution
08:12 Damen’s repair yards update ISO and OHSAS certification

2017 November 16

18:35 APL receives the ‘Best Green Shipping Line’ award from HAROPA
18:05 Shearwater GeoServices awarded ONGC survey
17:35 ITF: ‘new era for fishers begins’
17:23 Expert says geopolitical risks may push bunker prices slightly up
17:05 JAXPORT expands vehicle-handling capacity
16:51 Severnaya Verf will build six processing trawlers for Norebo Holding (photo)
16:35 Hapag-Lloyd implements GRI for Trans-Pacific Trade Eastbound from East Asia to USA and Canada
16:05 OOCL introduces the China Pakistan Express Intra-Asia service
15:37 Oldendorff Carriers in alliance with Welhunt starts transhipment operation in Vietnam
15:30 APM Terminals Poti adds two Azimuth Stern-Drive tugboats
15:05 Teekay LNG Partners establishes Teekay Multigas Pool
14:58 Norwegian Cruise Line orders PrimeServ upgrades for multiple vessels
14:17 Baltic transport ministers meet in Vilnius to discuss the common objectives of the Baltic States
13:49 Murmansk Sea Fishing Port handled 290,100 t in 10M’17, up 13.7% to (photo)
13:25 Sergey Kireev appointed as interim General Director of PJSC NCSP
13:00 Last Early Bird rate for Maritime Reconnaissance and Surveillance Technology conference 2018 expires 30th November 2017
12:38 “K” Line Group introduces new Total Auto-Logistics Business in Chile
12:12 Wärtsilä receives an order from Lunar Fishing Company to supply new trawler
11:59 Damen SAR vessel passes capsize test with engines running
11:58 Bunker prices go up at the Far East ports of Russia (graph)
11:33 First Borey-A nuclear underwater missile carrier to be floated out in Severodvinsk, November 17
11:11 FESCO to deliver production equipment to Great Wall Motors plant being built in the Tula region
10:50 Vostochny Port has shipped 400 mln t of coal from the date of its foundation (photo)
10:04 Brent Crude futures price up 0.18% to $61.98, Light Sweet Crude – up 0.05% to $55.36
09:42 IMO is holding a seminar focused on free-flowing maritime traffic in Montenegro
09:19 Baltic Dry Index down to 1,374 points

2017 November 15

18:00 RF Transport Ministry supports “Hydraulic Engineering Structures of Water Transport” Congress
17:35 EU experts performed comprehensive assessesment of Klaipeda Seaport security
17:12 Navigation season closed at inland water ways of the Amur Basin (photo)
16:46 Port of Klaipeda development to be coordinated by Governmental Commission
16:20 Port of Tallinn shortlisted for Green Port / Terminal Award