• 2017 September 21 15:26

    MABUX: Global bunker market turns in the rebalancing direction

    The Bunker Review is contributed by Marine Bunker Exchange

    World fuel indexes are at their highest levels in months on the back of strong demand and some key supply outages around the world.  Besides, easing fears about hurricane disruptions in the U.S. plus, another missile launch from North Korea last week have pushed fuel indexes up as well.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) has continued slight upward evolution in the period of Sep.14 – Sep.21:

    380 HSFO - up from 326.86 to 329,36 USD/MT (+2.56)
    180 HSFO - up from 367,07 to 368,71 USD/MT (+1.64)
    MGO         - up from 554.43 to 562.43 USD/MT (+8.00)


    The International Energy Agency (IEA) published an encouraging Oil Market Report last week, noting that global oil supply contracted for the first time in months while demand remains very robust. The agency said that oil demand growth could hit 1.6 million bpd this year, an upward revision from the 1.5 million bpd estimate last month. Refined product inventories are also nearing the five-year average level, a sign that the oil and fuel market is making a great deal of progress towards rebalancing. The report also dismissed fears that the hurricanes in the U.S. would dramatically reduce demand – the agency said any effects will be short-lived.

    Meantime, as per the IEA, investments are returning to the oil industry too slowly to eliminate the risk of tighter supply that would, in turn, cause price volatility even in the context of slowing global oil demand growth. Over the longer term, to 2040, the IEA forecast the share of oil in the global energy mix will decline only slightly, from 33 percent in 2015 to 31 percent in 2040, which means stable growth in demand as part of the growth in wider energy demand.

    OPEC in turn revised up its forecast for global oil demand growth as well, predicting consumption will expand by 1.42 million bpd this year, an upward revision of 50,000 bpd from a month earlier. Meanwhile, OPEC’s collective oil production dipped in August for the first time in four months. Output fell by 79,000 bpd in August from a month earlier, mostly the result of sizable outages in Libya, but also because compliance with the group’s cuts improved among other OPEC members. OPEC’s estimate for oil inventories in OECD countries also declined for the third consecutive month, putting total storage at 195 million barrels above the five-year average.

    While OPEC members have cut some 1.2 million barrels of production over the past year (plus a little less than 0.6 million bpd from non-OPEC members), that has not actually translated to the same reduction in exports. In fact, oil exports from the participating countries remain elevated, undercutting the efficiency of the agreement. As per the Wall Street Journal, OPEC exports have only declined by 213,000 bpd, as countries sell product from storage or otherwise reduce consumption to leave more oil for export.

    Iraq, the second-largest OPEC producer, may be facing a significant disruption to its oil exports this month. On September 25, citizens of the northern region of Kurdistan will vote in a referendum for national independence. If the referendum passes, as it is expected to, Kurdistan could begin proceedings to proclaim formal independence from Iraq, splitting the country in two. In fact, the referendum has very little international support: United States, the EU, Iraq and others have come out against it. But Kurdistan itself is rich in oil, possessing reserves equal to 45 billion barrels, and could potentially become a larger producer than Nigeria. According to some evaluations, Kurdistan currently exports about 600,000 barrels a day. As a potential result of the referendum, it’s possible that either Kurdish or Iraqi oil exports could be disrupted pushing oil and fuel prices further up.

    Last week the U.S. kept sanctions relief in place for Iran and preserved the landmark 2015 nuclear deal. The move was closely watched because President Trump has repeatedly expressed his displeasure with the deal. Still, the Trump administration is in the midst of a strategic review regarding its policy towards Iran, with a more comprehensive approach expected to be announced in October.

    Also, due to U.S. sanctions, Venezuela’s PDVSA reported it will no longer send or receive payments in U.S. dollars, instead choosing to work with euros. As per the statement, there will be a basket of currencies to liberate from the dollar and to fight against the economic blockade. But many view the policy as self-destructive.

    In Nigeria oil workers stopped the loading of oil products and natural gas and joined an indefinite nationwide strike on Sep.19. They demand better conditions and pay. Among strike conditions are also that roads to oil facilities to be repaired and army personnel to be withdrawn from security duties at the oil infrastructure installations. The government, on the other hand, says the strike is illegal. The situation in both, Venezuela and Nigeria continues rendering the potential support to fuel indexes.

    U.S. oil production rebounded sharply after a major disruption from Hurricane Harvey. After declining by about 750,000 bpd in the week after the storm, oil production currently stands at 9.51 million barrels per day (bpd) (up from 8.78 million bpd directly after the storm hit the U.S. Gulf Coast).  Still, inventories climbed again in the most recent EIA data release, with about 15 million barrels added over the three-week period.

    U.S. refineries along the Gulf Coast have been reporting a much better recovery than expected after being shut due to hurricanes Harvey and Irma. Meantime, the number of active oil and gas rigs fell last week by 8 rigs (the number of oil rigs decreased by 7 and the number of gas rigs - by 1) and now stands at 936 rigs, up 430 rigs from the year prior. Although the number of oil rigs are still up significantly year on year, the increases slowed in the second quarter, and have reversed in the third. The first quarter 2017 saw 137 oil rigs added in the United States, while the second quarter 2017 saw 97 rigs added. In stark contrast, the third quarter, for which there is still one weeks to go, has seen the total number of rigs decrease by 7.

    North Korea fired another missile over Japan on Sep.15. The launch took place just days after the U.N. Security Council approved new sanctions against Pyongyang for its Sept. 3 nuclear test. A missile flew over Japan’s northern island of Hokkaido, far enough to reach the U.S. Pacific territory of Guam. U.S. Defense Secretary Jim Mattis hinted on Sep.15 about the existence of military options on North Korea that might spare South Korea from a counterattack. But he declined to say what kind of options he was talking about or whether they involved the use of lethal force. The tension on Korea peninsula is still the factor supporting fuel indexes recently.

    There are more signs that the global fuel market has turned into the rebalancing direction. We expect bunker prices will continue upward evolution 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 December 15

18:20 Onezhsky Shipyard launched self-propelled hopper Silnaya (photo)
18:06 DOF sells the vessel Skandi Marstein
17:06 The Port of Gdansk to expand the Oliwskie Quay
16:50 Russia’s State Duma approves ensuring the priority of ships flying RF flag in the segment of short-sea shipping
16:21 CMA CGM announces GRR from Asia to West Africa
15:34 Construction at NIBULON’s transshipment terminal in Mykolaiv is in full swing
14:45 Klaipėdos Nafta and Eesti Gaas begin cooperation in small-scale LNG distribution business
14:18 Arctic Economic Council welcomes Korea Shipowners’ Association as first sub-Arctic member
13:51 Baltic Workboats delivered 24m combat pollution and diving support vessel to Port of Klaipeda
13:29 WMU Executive Board 21st Session meets in London
12:56 Marine Recruiting Agency launches training project for Rosterminalugol
12:33 Skangas to source LNG at import terminal on Isle of Grain, UK
12:10 Ningbo Zhoushan Port volumes up 9.6% to 933 million tons in Jan - Nov 2017
11:58 Azerbaijan Caspian Shipping Company holds training with participation of crane ships crew
11:32 Africa maritime cooperation centre launched
11:09 Throughput of port Helsinki (Finland) up 14% to 13.1 mln t in 11M’17
10:44 Brent Crude futures price up 0.11% to $63.38, Light Sweet Crude – up 0.39% to $57.26
10:30 Rolls-Royce delivers first mobile MTU gas engines for Rederij Doeksen
10:11 Port of Klaipeda (Lithuania) handled 39.21 mln t of cargo in 11M’17, up 6.5% Y-o-Y
09:57 IAA PortNews offers video of virtual round-table meeting “Best practices of coal transshipment in Russian ports”
09:32 Baltic Dry Index down to 1,668 points
09:16 GTT signs new Global Services Agreement with Chevron Transport Corporation
08:25 Safe Bulkers announces acquisition of a Post-Panamax class dry-bulk vessel
07:05 Port of Los Angeles sets new record for highest monthly container volumes
06:04 CMA CGM announces new FAK rates from Asia to North Europe
05:04 The Foundation Det Norske Veritas assumes full ownership of DNV GL
04:43 Damen Shiprepair & Conversion wins contract for first European conversion of a dredger to dual-fuel LNG / MGO

2017 December 14

18:03 Bunker prices still maintain the potential for growth
18:02 Pacific centre launches on low-carbon shipping mission
17:37 Gazprom and Shell to handle oversized equipment for Baltic LNG at Commercial Sea Port of Ust-Luga (photo)
17:29 Key decisions from MEPC 71 related to implementing BWM Convention outlined at BWMTech London Conference
17:05 Ulstein and TTS shortlisted for OSJ Innovation Award
16:35 HHI Group receives support of LR in building an LNG-fuelled future
16:05 Aker Solutions secures subsea services agreement with Statoil
15:50 Commercial Sea Port of Kandalaksha handled 1.46 mln t of cargo in 11M’17, up 3 times Y-o-Y
15:36 Special issue of PortNews magazine published for Transport Week is available online
15:25 United Nations experts endorse RF initiative
15:07 BASF extend their fleet with another Konecranes barge handler
14:52 Infrastructure development will be one of priorities of Vladimir Putin’s new presidential term
14:45 CMA CGM launches new, innovative and complementary set of products
14:03 Wärtsilä and Mitsubishi Heavy Industries MME to collaborate in creating improved power and propulsion for ships
13:31 CLdN adds fourth weekly sailing between Gothenburg and Zeebrugge
13:01 GTT and Korean DSEC sign Technical Assistance and License Agreement
12:29 IMO encourages member countries to ratify and enforce the London Protocol to prohibit dumping at sea
12:00 Bahri welcomes Abdullah Aldubaikhi as new CEO
11:30 Bunker fuel is still in short supply at the Far East ports of Russia (graph)
11:01 Port of Oakland import volume ahead of last year’s pace
10:40 Outright prohibition of heavy fuel in the Arctic is not reasonable – maritime administrations of Russia and Finland
10:21 Brent Crude futures price up 0.58% to $62.8, Light Sweet Crude – up 0.18% to $56.7
10:14 ABS awarded contract by Cenac Marine Services to support compliance with US Coast Guard (USCG) Subchapter M requirements
09:59 Russia and Finland have similar positions on double control of fuel used by vessels
09:30 Amsterdam joins the ‘Premier League’ in the ethanol market
09:14 Baltic Dry Index down to 1,730 points
08:28 APL introduces mobile application for container tracking
07:02 Port of Felixstowe handles 1 million TEU by rail

2017 December 13

18:32 The European Ports Forum assembles in Brussels
18:07 Samskip adds 100 rail wagons to its fleet
17:58 Rosmorport taps Sergey Simonov as Deputy General Director
17:31 SENSREC project to continue support Bangladesh to comply with international requirements towards accession to the IMO ship recycling treaty
17:25 CMA CGM issues update on winter surcharge on imports into St Petersburg, Ust-Luga & Bronka (Russia)