• 2017 November 23 16:03

    Bunker prices may turn into irregular phase in the lead-up to OPEC’s meeting

    The Bunker Review is contributed by Marine Bunker Exchange

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) slightly increased in the period of Nov. 16 - Nov. 23:

    380 HSFO - up from 355.79 to 360.50 USD/MT (+4.71)
    180 HSFO - up from 398.07 to 401.79 USD/MT (+3.72)
    MGO         -up from 585.14 to 590.00 USD/MT  (+4.86)


    An agreement by OPEC and other producers such as Russia to limit oil production has supported prices in recent months, with the deal expected to be extended at the group's next meeting on Nov. 30.

    But fears of hesitation on Russia's part weighed on prices in the beginning of the week.  Reports emerged that Russia is considering a delay on the decision to extend the cut. That’s after Energy Minister Alexander Novak hinted more than once that from Moscow’s perspective, this decision is far from urgent (taking into consideration that RF budget is based on Brent at US$40). Russian oil firms are arguing that their production restrictions are only benefiting others while Russian companies have to cut back from new projects in which they have heavily invested. As a result, on Nov.21 Russian oil producers met with the energy ministry to discuss only a six-month extension, as opposed to the nine months originally offered by President Vladimir Putin. Besides, to some extent, lower oil prices could be more beneficial for the Russian economy. Russia prefers to keep the ruble cheaper as this stimulates exports, curbs imports, and boosts competitiveness. Traditionally, the Russian currency has followed Brent’s moves closely. If, however, Brent goes high enough, there may be a spike in speculative interest in rubles, which will cause the currency to rise, too.

    At the same time, top crude exporter Saudi Arabia is lobbying oil ministers to agree next week on a nine-month extension to OPEC-led supply cuts. Energy minister Khalid al-Falih said, that targets to reduce global oil surplus would not be reached to March 2018. This also suggests, that oil cut agreement needs to be extended.

    Venezuela struggles to pump enough crude oil to meet the country’s OPEC output target. Meantime, country’s oil output hit a 28-year low in October as state-owned PDVSA tries to find the funds to drill wells, maintain oilfields and keep pipelines and ports working. Venezuela's oil production is to fall by at least 250,000 bpd in 2017, as U.S. sanctions and a lack of capital obstruct operations. Some OPEC members expect the fall to accelerate in 2018, reaching at least 300,000 bpd. At a recent internal OPEC meeting, Venezuelan officials were asked to give a clearer picture of the country’s declining output. Saudi Arabia would not increase production in order to compensate for falling Venezuelan output. However, rising heavy oil production from Iraq, Canada and Brazil are offsetting the losses. As en example, Iraq has increased shipments of crude and condensate to India by 80,000 bpd this year as Venezuelan deliveries fell by 84,000 bpd. The second largest OPEC producer also has exported 201,000 bpd more oil to the United States this year through October as Venezuelan shipments dropped about 90,000 bpd.

    The bunker indexes rose due to drop in crude supplies from Canada to the United States. TransCanada Corp's 590,000 (bpd) Keystone pipeline, which links Alberta’s oil sands to U.S. refineries, remained shut after a 5,000-barrel leak in South Dakota last week. It seems, that the shut-in would support the prices due to fewer barrels going into Cushing, Oklahoma, the delivery point of the WTI contract.  TransCanada Corp said it will cut deliveries by at least 85 percent Keystone crude pipeline through to the end of November.

    U.S. crude oil inventories fell by 1.9 million barrels - 457.1 million barrels last week. U.S. crude oil imports averaged 7.9 million barrels per day last week, down by 25,000 barrels per day from the previous week. At the same time U.S. crude oil production was up last week by 13,000 bpd to 9.648 million bpd. The number of active oil rigs increased this week by 9. This happens as rising prices stimulate investments into oil production in the U.S. and it levels OPEC efforts to decrease oil glut.

    OPEC’s meeting on November 30 and the deal extension expected as the single most important driver for fuel prices, as the effect of tensions in the Middle East begins to subside in the absence of any escalation. We expect bunker prices may have high volatility and change irregular next week. Further trend will be formed after OPEC’s meeting on November 30.



    * 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 July 17

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16:34 Prosafe awarded important contract in Brazil
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14:44 Baltic Ports Conference 2018 will focus on financing, economy and energy supply
14:23 Jan De Nul launches ultra-low emission vessel Diogo Cão in China
13:41 Severnaya Verf will lay down a longline factory vessel Gandvik-1 on July 20
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12:48 Containership MOL Truth earned 'Ship of the Year 2017'
12:19 15,000 TEU container ship “Afif” named in London Gateway
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2018 July 16

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18:16 Diana Shipping announces signing and drawdown of a US$75M Term Loan Facility with BNP Paribas
17:55 Director Kopczynska addresses WMU students and faculty on maritime Europe
17:40 Great Lakes announces receipt of $70 million San Jacinto award
17:33 Bollinger Shipyards commits USCG icebreaker program to Florida
17:31 New vehicle terminal announced at the Port of Southampton
17:18 Hapag-Lloyd hikes rates for East Asia-Arabian Gulf trade
17:08 ING Bank signed a USD 80 million syndicated loan agreement with NIBULON
16:43 Minimum training standards for fishers under review
16:25 USCG rescues 7 people from capsized boat near Horn Island
16:20 Port of Antwerp sets new records with best half year ever
15:56 Freeport of Riga showed good growth in the first half of 2018
15:32 Maersk Drilling secures two contract extensions in the North Sea
15:19 Container throughput of port Hong Kong (China) down 3.6% to 9.88 million TEUs in Jan-June’18
15:03 Van Oord will acquire MPI Offshore
14:44 Average wholesale prices for М-100 HFO down to RUB 17,589 in RF spot market
14:35 Wärtsilä to assist Transocean with thruster maintenance optimisation and dry-docking cost reductions
14:25 Jan De Nul Group acquires part of MPI’s offshore business unit
14:11 Fednav accepts delivery of MV Federal Dee, its 60th owned vessel
13:46 Eastern Shipbuilding inks contract with Bisso Offshore for RApport 2400 Ship Handling Tug duo
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13:07 Court dismisses EUR 9 million claim against Armada Seismic Invest II AS
13:06 Hong Kong will host ShipTek Ship Owning & Ship Management Conference & Awards on 30 August 2018
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11:25 Fincantieri contracted to build LNG-fueled pair for TUI Cruises
11:01 Baltic Dry Index up to 1,666 points
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11:24 MAN Energy Solutions ready for SMM 2018
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2018 July 14

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