• 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 May 20

09:21 Hapag-Lloyd announces FAK rates from North Europe to Caribbean, Central America and South America West Coast
09:19 EU Ambassadors visit Peru’s largest multipurpose terminal
09:16 SEA\LNG bolsters its knowledge base with the addition of MAN Diesel & Turbo
09:13 Finnlines starts new direct service between Helsinki and Aarhus
09:11 Canadian Coast Guard selects ABS for fleetwide contract

2018 May 19

10:56 CMA CGM announces FAK rates from Asia to North Africa
10:01 CMA CGM announces PSS from Nigeria to India and Vietnam
07:50 Port of Kiel welcomes “Saga Sapphire” maiden visit
07:47 The “GRANDE HALIFAX” christened in Halifax

2018 May 18

18:00 Denis Manturov appointed as the Minister of Industry and Trade of the Russian Federation
17:44 Port of Hamburg posts Q1 2018 results
17:39 Yevgeny Ditrikh appointed as the Minister of Transport of the Russian Federation (photo)
17:38 Seaspan accepts delivery of third 10000 TEU SAVER containership in four ship series
17:35 Prosafe extends standstill agreement with Cosco
17:17 Okskaya Sudoverf delivered Belmax 1, first non-self-propelled tank barge of Project ROB20
16:51 Special event on ports at IMO Headquarters will focus on single window, ports and logistics
16:35 Port of Hamburg receives ‘Best Global Seaport’ award
16:05 IMO begins scoping exercise on autonomous vessels
15:42 Brand-new jetty at Rotterdam LBC Tank Terminals ready for vessels
15:40 HELCOM group meets in Riga to discuss nutrients from land-based sources
15:39 Multimillion pound investment continues in Grangemouth, Scotland's premier port
15:38 India benefits from IMO training on port emissions
15:11 Nevsky Shipyard starts sea trials of medium sea tanker of project 23130 (photo)
14:44 Star Marine takes delivery of RAstar 3400 quartet
13:53 Ladozhsky Bridge in the Leningrad Region drawn twice to let PORT FLEET’s tugboats through
13:47 Eniram signs MoU with Arista Shipping to participate in Project Forward for developing new generation of bulk carriers
13:29 Statoil ASA changes name to Equinor ASA
13:00 Cargo turnover at inland water ways of Azov-Don Basin down 12.7% to 606,000 tonnes
12:42 ABS to provide class and certification services for the entire Canadian Coast Guard fleet
11:57 Astrakhan branch of Zvyozdochka shipyard launches rescue towboat for RF Defence Ministry (photo)
11:35 Huntington Ingalls authenticates keel of submarine Montana (SSN 794)
11:18 Akademik Lomonosov FPU arrives in the Kola Bay (photo)
11:03 UAE signs MoU with ITF
10:32 Throughput of port Kaliningrad in 4M’18 up 10% Y-o-Y to 4.71 million tonnes
10:30 Scorpio Tankers announces sale and leaseback agreements for five product tankers
10:13 Brent Crude futures price up 0.30% to $79.54, Light Sweet Crude – up 0.21% to $71.64
09:56 ZNT Yard launched the lead hydrographic survey vessel and lays down two more HSVs (photo)
09:17 Baltic Dry Index fell to 1,305 points

2018 May 17

18:05 Technava and Propulsion Analytics join forces for providing management solutions to the shipping industry in Greece and Cyprus
17:54 Throughput of port Taganrog in Jan-Apr'18 up 39.8% to 1.46 million tonnes
17:35 EUROGATE chosen as “Best Green Container Terminal Operator 2018”
17:19 Throughput of port Vyborg in 4M’18 up 22% Y-o-Y to 417,000 tonnes
17:05 Costa Group and Marseille Fos Port announce partnership
16:48 Throughput of Rostov-on-Don port in 4M’18 up 29% Y-o-Y to 5.5 0 million tonnes
16:35 Yang Ming wins Best Shipping Line – Intra-Asia Award
16:20 Throughput of port Primorsk in 4M’18 down 19% Y-o-Y to 18.10 million tonnes
16:05 ESPO congratulates seven Wadden Sea ports for obtaining EcoPorts environmental performance standard
15:37 Small-Mid Scale LNG Summit to provide industry solutions
15:34 Rimorchiatori Laziali takes delivery of two vessels from Sanmar
15:31 Konecranes Gottwald Mobile Harbor Crane for Nigerian river port
15:16 Maritime2020 to prepare shipping professionals for IMO Regulations
14:52 Throughput of port Vysotsk in 4M’18 is flat Y-o-Y at 6.19 million tonnes
14:49 Rolls-Royce and Finferries sign cooperation agreement to optimise ship safety and efficiency
14:28 Throughput of port Ust-Luga in 4M’18 is flat Y-o-Y at 32.59 million tonnes
14:05 NSW Ports introduces Australia's First Environmental Incentive for Shipping Lines
13:49 Lithuania and Poland to cooperate in defining the future transport budget of the European Union
13:04 CMA CGM announces GRR from Asia to East Africa
12:57 Autonomous maritime ecosystem to be created by 2025 under One Sea project
12:26 The port of Saint-Petersburg handled 19.31 million tonnes of cargo in 4M’18, up 16% Y-o-Y
12:04 Maersk Line recognized as the Best Global Shipping Line