• 2018 January 18 16:02

    MABUX: Bunker prices wait for the new market catalysts

    The Bunker Review is contributed by Marine Bunker Exchange

    Last week did not bring any firm trend for world fuel indexes. A production-cutting pact between the Organization of the Petroleum Exporting Countries, Russia and other producers has given a strong support to oil prices, with both benchmarks hitting levels not seen since December 2014. Growing signs of a tightening market after a three-year rout have bolstered confidence that fuel prices can be sustained near current levels. Meantime, the further trend’s forecast is rather contradictive: some see more room on the upside with outages in key oil producing countries, strong demand expected this year and ongoing declines in inventories. But others believe the rally has gone too far and there will be a reaction in U.S. shale very soon.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) went slightly down in the period of Jan.12 – Jan.18:
        
    380 HSFO - down from 373.14 to 371,93 USD/MT (-1.21)
    180 HSFO - down from 413,64 to 412,36 USD/MT (-1.28)
    MGO         - down from 635.21 to 634.79 USD/MT (-0.42)


    There is a variety of scenarios on how the deal of the OPEC and non-OPEC production cuts of 1.8 million barrels per day (bpd) might come to an end, featuring civil unrest in Venezuela and Iran that may lead to supply disruptions; Russia pulling out of the pact in June; OPEC members and other parties to the deal starting-or continuing-to cheat; and oil prices rising too high.

    At the moment Russia may be already on its way out of the OPEC output reduction deal. Russian Energy Minister Alexander Novak may discuss the country’s potential exit from the pact in Oman next week. As per Russia, the market is becoming balanced and the surplus is decreasing, but the market is not completely balanced yet. It needs to be monitored before the decision is made.

    In addition to the OPEC+ pact, fuel prices have found support from eight consecutive weeks of U.S. crude inventory drops. U.S. commercial crude stocks fell by almost 5 million barrels in the week to Jan. 5, to 419.5 million barrels. That was slightly below the five-year average of just over 420 million barrels, the target for OPEC and others cutting output.

    Despite the oil price rise, US crude oil production dipped last week. It had been on a steady up-ward trajectory during Q4 2017. But the first week of 2018 saw production in the United States slipping from 9.782 million bpd in the last week of 2017, down to 9.492 million bpd.  The number of active oil and gas rigs on the contrary rose last week, increasing by 15 total rigs, bringing the total rigs to 939, which is an addition of 280 rigs year over year. The number of oil rigs in the US increased by 10 and stands at 752 versus 522 a year ago.

    The EIA sharply revised up its forecast for U.S. oil production this year and next, predicting aver-age output of 10.3 million bpd in 2017 (up nearly 300,000 bpd from last month’s forecast) and 10.8 million bpd in 2019. The EIA predicts that by November 2019 the U.S. could hit 11 million bpd, surpassing Russia as the world’s largest producer. The strength of U.S. shale is one of the main pressure factors on the fuel market, but it remains to be seen if shale drillers can achieve such high production levels.

    U.S. President Donald Trump extended sanctions relief granted to Iran under its 2015 nuclear deal with the United States and other world powers. However, Trump, who has vowed to scrap the pact, was expected to give the U.S. Congress and European allies a deadline for improving it. Without improvements, Trump would renew his threat to withdraw from the agreement. Iran in turn said its nuclear program is only for peaceful purposes. It has also said it will stick to the accord as long as the other signatories respect it, but will decline the deal if Washington pulls out. The U.S. Congress requires the president to decide periodically whether to certify Iran’s compliance with the deal and issue a waiver to allow U.S sanctions to remain suspended.  The forecasts have projected U.S. sanctions could threaten several hundred thousand barrels per day of Iranian oil production, but unilateral action from Washington won’t be as effective as the coordinated international sanctions from years ago.

    China imported 12 percent less crude oil in December than in November, when crude imports had hit a record high, sparking immediate concern about demand from one of the world’s top consumers. The record-high November oil shipments to China were stockpiled, and used by refiners during the last month of the year. Despite the December drop, for full-2017, crude oil import figures reveal a 10.1-percent increase from 2016, at 8.43 million barrels daily. Besides, the first lot of oil import quotas issued by the government last month (121.32 million tons) is also high enough to suggest a rebound in oil imports this year as quotas were 75 percent higher than the first allocations for 2017. China is now the world’s biggest oil importer, overtaking the United States for the first time ever.

    India’s oil demand in turn grew at its slowest pace in four years in 2017 at only 2.3 percent. Slower car sales, new taxes, and a campaign by the central bank to remove certain currency notes hit retail and wholesale markets – these factors weighed on India’s fuel consumption. India has long been billed as one of the most important growth markets for global fuel demand, but it continues to lag behind expectations.

    In Colombia, the National Liberation Army (ELN) is reported to be restarting its militancy against state forces and oil infrastructure after the end of a critical ceasefire to facilitate talks that would end 53 years of war. As a result, Transandino pipeline stopped operating on Jan. 14 after a bomb planted by ELN rebels caused a crude spill into a nearby river. 20% of government revenues in Colombia come from the exploration, production, and taxation of petroleum products in the country, but three years of low oil prices have lowered that proportion to almost zero.

    Meantime, oil production in Venezuela has jumped to nearly 1.9 million barrels per day, suggesting the Latin American nation’s output recovers despite a lack of access to global credit markets. Venezuela’s November production was 1.834 million bpd. However, U.S. newest sanctions prevent Venezuelan oil Companies from repatriating any earnings from the U.S. They also make it impossible to access American credit markets, forcing Venezuela to seek deals with Russia and China to refinance crippling amounts of debt.

    The start of 2018 was not so active on global fuel market while the fuel indexes still remained underpinned by tightening supply and strong global demand. We expect bunker fuel prices may stay steady 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)




2018 May 26

23:58 Costa Cruises fleet capacity to rise by 43% by 2021

2018 May 25

18:07 AIDAmira joins to the AIDA Cruises fleet
17:51 Azerbaijan Caspian Shipping Company cooperates with Columbia Shipmanagement to organize internship for ACSC 20 staff members
17:42 Carbon targets for shipping can only be met with ‘zero CO2’ fuels - ICS
17:40 IMO takes first steps to address autonomous ships
17:30 Marine Technics carried supplied marine pumps MT-Azcue for cargo vessels of different types
17:18 Container Terminal St. Petersburg in 1Q invested more than € 3.5 million in development, upgrade programme
17:04 Med Marine tugboat joins the company’s harbour fleet in Turkey’s Izmit Bay
16:59 Aleksandr Bryntsev appointed as Director General of Murmansk Shipping Company (photo)
16:25 Sovcomflot to provide technical supervision for the construction of Rosneft’s new LNG-fuelled tankers
16:04 Sanmar supplies a powerful tug to Forth Estuary Towage in Scotland
15:41 SMM advance press conference covered trends in SMMart Shipping
15:04 Seaspan accepts delivery of fourth 10000 TEU SAVER containership in four ship series
14:03 Port of Oakland online shipping platform goes live
13:33 MSC Splendida enters Busan Port
13:08 Klaipėda LNG terminal receives the 50th cargo
12:32 Transport and logistics sector of Latvia continues work with Chinese partners
12:03 Panama Canal nominated as finalist for Lloyd’s List’s Environment Award
11:50 Taganrog Sea Commercial Port handled 333,000 tonnes in QI’2018, up 4% Y-o-Y
11:24 Multipurpose Reloading Complex handled 1.02 million tonnes of cargo in QI’2018, down 20% Y-o-Y
11:03 Port of Amsterdam launches digital business guide
10:49 NOVATEK and TOTAL become partners in Arctic LNG 2 project
10:27 New Belgium container connection bolsters Port of Hull
10:11 Brent Crude futures price down 0.19% to $78.64, Light Sweet Crude – down 2.25% to $43.97
09:56 Bunker prices are slightly up at the Port of Saint-Petersburg, Russia (graph)
09:33 Baltic Dry Index up to 1,109 points
09:22 ITF backs US dock workers in dispute with port authorities
08:20 Port of Vancouver makes history with the arrival of the 25 millionth
07:18 First eleven companies participate in Nextlogic

2018 May 24

19:04 Coal to Vostochny Port to be transported on Kuzbass-Vostochny Port route by innovative rolling stock
18:07 ZIM posts Q1 2018 results
17:31 Bureau Veritas publishes vital resource for decommissioning industry
17:24 Italy’s first, fully-automated gantry cranes reach Vado Ligure
17:17 Best quarter performance ever at CTSP terminal: 168,500 TEUs, a 7.8% container traffic growth
17:09 Successful testing programme with enhanced Wärtsilä’s navigation systems promotes operational safety and efficiency
16:57 MSC optimises its Transpacific-USWC network
16:15 MABUX: Bunker prices continue upward trend
15:12 UCL Port’s 1Q volumes decline 3.9% Y/Y to 9.4 million tonnes
15:10 ABS evaluation demonstrates feasibility of LPG as fuel strategy for Dorian LPG
14:58 MAN to equip world’s first LNG-powered fishing trawler
14:55 VARD secures contract for one stern trawler for Nergård Havfiske
13:06 TCSP Group’s 1Q volumes fall 8.4% Y/Y to 3.88 million tonnes
12:08 Sea Port of St. Petersburg sees strong growth in 1Q volumes
09:26 Baltic Dry Index drops 37pts to 1162 points
09:08 akquinet and IDENTEC SOLUTIONS join forces to revolutionize refrigerated container management
08:39 Maersk Line starts new transatlantic service between Europe’s Mediterranean region and Canada
08:34 Compagnie Maritime Monégasque and Damen join forces to introduce Fast Marine Access in Brazil

2018 May 23

17:54 Container Terminal Saint-Petersburg invested RUB 256 million in modernization of its facilities in QI’2018
17:27 Greece suggests arranging cruise lines to Russia
17:00 Rosmorrechflot comes out for replacement of shipbuilding subsidies with cheap financing
16:16 Agreement on Enhancing International Arctic Scientific Cooperation enters into force
15:48 New Belgium container connection bolsters Port of Hull
15:25 DALO chooses SARIS to support SAR operations
15:03 FESCO transports three transformers from Novorossiysk for Moscow central heating and power plants
14:42 Ukraine’s water transport carried 0.3 million passengers in 4M’18, down 3%, Y-o-Y
14:21 Hapag-Lloyd update on restrictions for DG cargo handling at FIFA World Cup in Russia
13:59 Cargo transportation by Ukraine’s water transport fell by 18.5% to 1.0 million tonnes in 4M’18
13:36 SASCO BoD elected Aleksey Pavlov as Director General of the company
13:13 “K” Line announces delivery of special coal carrier “CORONA XANADU”
12:52 Tallink Grupp to list shares also on Helsinki Stock Exchange