• 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 October 17

18:03 PGNiG and Venture Global LNG announce LNG Sales and Purchase Agreements for 2 million tonnes per year
17:46 The Freeport of Riga Authority continues to develop cooperation with China
17:22 Port Manatee enjoys record fiscal year with diverse growth
17:00 North Sea Port and Titan LNG successfully supply sea-going vessel with LNG fuel
16:55 33 LNG carriers and 8 gas condensate carriers with export cargo left port Sabetta in April-June 2018
16:24 Baku International Sea Trade Port launches two new tugboats
16:02 Hapag-Lloyd announces General Rate Increase for East Asia to Mexico, Central America, West Coast of South America, Caribbean & Panama trade
15:46 New BIMCO & IBIA Bunkering Guide available
15:23 NOVATEK and Fluxys plan to build an LNG terminal in Rostock
15:02 NYK develops original software that diagnoses combustion chamber problems
14:40 RF Government allocates RUB 8.4 billion for the Far East development
14:21 Scorpio Bulkers announces time charter-out agreements
14:03 CMA CGM implements Empty Repositioning Surcharge for exports from all Turkish ports
13:32 Ørsted contracts Van Oord for cable installation Borssele I & II
13:21 Throughput of Ukraine’s seaports in 9M’18 fell by 1.7% Y-o-Y to 95.9 million tonnes
13:04 CMA CGM to introduce new BAF on Asia-Africa trade
12:30 GTT and Dongsung Finetec sign a Memorandum of Understanding
12:02 Maritime and Port Authority of Singapore and partners sign MoU for 3D printing facility and applications in maritime sector
11:53 Identifying barriers to cutting emissions through just-in-time operations
11:27 Norddeutsche Reederei H. Schuldt joins V.Group
10:50 Brent Crude futures price down 0.09% to $81.34, Light Sweet Crude – up 0.06% to $71.88
10:42 CMA CGM to introduce new BAF on Europe-Africa trade
10:37 Damen Shipyards Galati hands over 74-metre fishery research vessel to Angolan government
10:27 Maritime Arctic Competence Center opens in Saint-Petersburg
09:42 KN invests in environmental protection measures
09:20 Baltic Dry Index is down to 1,578 points

2018 October 16

18:33 Maersk Line announces new FAK rates from Mediterranean to West and Central Asia
18:03 ABS holds two seminars at the 58th Genoa International Boat Show
17:55 Throughput of port Kaliningrad in 9M’18 grew by 5% Y-o-Y to 10.65 million tonnes
17:36 Wärtsilä opens the first International Maritime Cyber Centre of Excellence in the world
17:03 CMA CGM announces Overweight Surcharge on Asia and India to Africa trades
16:56 Wärtsilä launches Acceleration Centre in Singapore and partners with MPA and PSA Marine to develop IntelliTug
16:40 Throughput of port Vyborg in 9M’18 up 22% Y-o-Y to 1.33 million tonnes
16:21 Throughput of port Primorsk in 9M’18 fell by 11% Y-o-Y to 39.80 million tonnes
16:03 Höegh LNG announces amendment of the Höegh Gallant time charter
15:44 LUKOIL starts construction of facilities at Rakushechnoye field
15:22 Throughput of port Vysotsk in 9M’18 climbed by 6% Y-o-Y to 13.69 million tonnes
15:03 Avatar Logistics initiates cooperation with Sand & Grus AB Jehander and buys the vessel MS Jehander
14:41 Throughput of port Ust-Luga in 9M’18 declined by 5% Y-o-Y to 72.38 million tonnes
14:20 CMA CGM announces GRR from Far East to West Africa
14:03 Lithuanian Railways, Metrans and the Port of Hamburg strengthen relations
13:52 Throughput of Port St. Petersburg up 12% to 44.22 million tonnes in 9M’18
13:06 Scorpio Bulkers announces update on scrubbers
12:39 Project 22800 small missile ship Burya to be floated out on 23 October
12:13 Rolls-Royce and Intel announce autonomous ship collaboration
11:55 The Port of Riga outlines a vision for future development of Spilve Meadows
11:31 Ørsted selects GeoSea for Borssele 1 & 2 foundation and turbine transport and installation
11:14 Jan De Nul will dredge access channel to Guayaquil Port
11:11 RF Navy’s Baltic Fleet detachment completed tasks in Mediterranean Sea
10:59 Damen Maaskant Shipyards Stellendam celebrates 70 years and bids farewell to director Frits van Dongen
10:50 Detachment of RF Navy's Pacific Fleet completes visit to Republic of Korea
10:28 WMU holds needs assessment workshop in Jordan
10:02 Brent Crude futures price up 0.31% to $81.03, Light Sweet Crude – up 0.11% to $71.86
09:43 IMO ​pushing forward with tackling greenhouse gas emissions
09:17 Baltic Dry Index is up to 1,584 points

2018 October 15

18:23 MOL joins hands with partners to launch FOCUS project
17:59 Moscow to host a conference on construction of LNG-powered and LNG bunker ships on October 24
17:46 Algoma announces cancellation of Croatian newbuilds contracts
17:05 Klaveness Combination Carriers AS registered on NOTC
16:56 Tall ships arrive at Port of Ipswich as part of 'Race of the Classics'