• 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 September 25

18:24 BV joins global industry alliance (GIA)
18:00 Patrol boat of Project 03160 built for RF Navy’s Baltic Fleet by Pella Shipyard completes sea part of state trials (photo)
17:37 Fincantieri delivers "Viking Sun" in Ancona
17:31 APM Terminals improves productivity, costs and flexibility with a win-win labor strategy
17:12 Intermodal terminal operations to be moved to Hisingen in December
16:47 FueLNG completes first commercial LNG bunkering in Singapore
16:32 General Dynamics secures $5bn U.S. Navy’s contract for ballistic-missile submarine
16:20 Murmansk Region Governor: energy infrastructure for MTH project to be completed by the end of 2019
15:41 Large ASW ship Vice-Admiral Kulakov provided security of Indian tanker’s passage through Gulf of Aden
15:13 Russian and Chinese military seamen practiced rescuing a ship in distress
14:50 Krylov Centre at the 13th International Exhibition & Conference RAO/CIS Offshore 2017
14:25 RF Navy’s ASW ships Onega and Naryan-Mar repelled simulated enemy’s air attack in the White Sea
14:01 Average wholesale prices for М-100 HFO up to RUB 12,711 in RF spot market
13:38 Zelenodolsk shipyard launches high-speed passenger ship of Project А145Е for UAE customer
13:04 Damen Shipyards Yichang launches first DT8000 SD, Damen Tanker 8000 Shallow Draft (photo)
12:32 Transocean announces retirement of six floaters
11:30 Fincantieri to build a next-generation ship for Cunard
11:03 The 28th meeting of the Tokyo MOU Port State Control Committee held in Vladivostok
11:00 ABS approves GMS self-elevating drilling unit design
10:29 Asia’s Maritime Technology Cooperation Centre up and running
10:27 Golden Ocean sells six Ultramax vessels
09:55 Cargo transportation by inland water ways of Russia down to 74.5 mln t in 8M’17
09:33 Brent Crude futures price down 0.21% to $56.3, Light Sweet Crude – down 0.28% to $50.52
09:16 Baltic Dry Index up to 1,502 points

2017 September 22

18:04 ESL Shipping's second LNG-fueled dry cargo vessel was named Haaga
17:47 Black Sea Fleet frigate Admiral Essen returned to Sevastopol
17:22 Port of Gdansk throughput up 4% to 25.5 mln t in Jan-Aug'17
16:58 Pella Shipyard (Leningrad Region) launched the harbor tugboat of Project 04690 (graphics)
16:35 Connecting Europe Conference takes place in Tallinn
16:00 Throughput of port Kaliningrad in Jan-Aug'17 grew by 15% to 9.02mln t
15:33 Wan Hai Lines awarded “Container Shipping Line of The Year India-Far East Trade Lane” for the sixth time in seven years
15:19 Throughput of port Vyborg up 16% to 935,600 t in 8M’17
14:55 Throughput of port Vysotsk up 4% to 11.74 mln t in Jan-Aug'17
14:33 Neptun shipyard in Rostock finishes first engine room module for AIDAnova
14:20 Mooring trials of nuclear-powered icebreaker Arktika scheduled for early 2018
14:02 Polarcus awarded broadband 3D project in Asia Pacific
13:43 USCG to present Amver Awards to Dutch ship owners at Europort 2017
13:32 MOL issues "Safety, Environmental and Social Report 2017"
13:17 Throughput of port Primorsk in 8M’17 down 7% Y-o-Y to 40.12 mln t
13:02 PhilaPort container throughput up to 54,185 TEUs in August 2017
12:55 Baltiysky Zavod launches Sibir, first serial nuclear-powered icebreaker of Project 22220 (photo)
12:42 Meyer Werft to build cruise ship for Saga Cruises
12:01 Singapore will host 18th Ballast Water Management Conference on 7-8 February 2018
11:40 Throughput of port Ust-Luga up 12% to 67.54 mln t in 8M’17
10:28 Throughput of Big Port St. Petersburg up 11% to 35.26 mln t in 8M’17
10:09 Damen displays leading position in global OPV market
09:54 Brent Crude futures price up 0.16% to $56.52, Light Sweet Crude – up 0.28% to $50.69
09:35 Bunker prices are flat at the port of Saint-Petersburg, Russia (graph)
09:17 Baltic Dry Index up to 1,470 points

2017 September 21

18:01 Nuclear missile cruisers of RF Navy's Northern Fleet conducted bilateral exercise with firing
17:38 CPC has accepted three million tons of crude oil from the Russian fields on the Caspian shelf
17:10 FESCO delivered hydraulic equipment weighing over 500 tons to the Krasnoyarsk power plant
16:43 Ukraine’s water transport carried 0.4 mln passengers in Jan-Aug'17, up 40.2%, Y-o-Y
16:19 Vympel Shipyard dispatched two fast patrol boats of Project 12150, Mangust, to Sakhalin (photo)
16:02 Rolls-Royce and Inmarsat sign ship energy management agreement
15:26 MABUX: Global bunker market turns in the rebalancing direction
15:24 Cargo transportation by Ukraine’s water transport down 11.4% to 3.6 mln t in 8M’17
15:02 Wärtsilä marine gear boxes to be produced by Siemens
14:41 Black Fleet frigate Admiral Essen returns to Sevastopol from Mediterranean
14:02 Finnlines to lengthen four of its "Breeze series" vessels