• 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 August 15

18:33 Equinor extends partnership with The Arctic Race of Norway
17:56 Port Kavkaz seven-month volumes soar 30% Y/Y to 25.21 million tonnes
17:36 Russian Gov't to allocate RUB 500 million in subsidies to support small-tonnage fishing ships construction, Rosrybolovstvo says
17:34 Maersk Line to rise rates from Far East to East Coast South America
17:30 Yang Ming orders ten 2,800 TEU containerships
17:19 Nor-Shipping 2019 takes place in Oslo and Lillestrøm, Norway, from 04 to 07 June 2019
16:05 New Times Shipbuilding announces delivery of oil tanker
15:04 Concordia Maritime AB announces interim report for H1 2018
15:04 Rosrybolovstvo looks into building a series of three RVs as from 2020
14:12 Multipurpose Reloading Complex spends over RUB 600,000 on employee benefits and rewards programme
13:20 Konecranes to deliver more electric RTGs to Luka Koper in Slovenia
13:02 Join Marinet Conference at SMM 2018, Hamburg
12:32 Prime Minister Dmitry Medvedev gives green light to NLR construction project
12:01 WW Ocean presents new-look trade maps resembling public transit maps
11:15 Port of Vancouver posts H1 2018 results
10:41 Aker Solutions wins orders for Liuhua power umbilical systems in China
10:21 Nor-Shipping 2019 devotes entire hall to new focus on Blue Economy
10:05 Crude oil futures drop 0.22% to $72.3 in London and 0.48% to $66.72 in New York
09:29 Bunker prices at Port of St. Petersburg show mixed movements

2018 August 14

18:30 Hapag-Lloyd annonces General Rate Increase from East Asia to USA and Canada
18:12 FE Railways' loaded freight in Jan-Jul up 2% to 28.2 million tonnes
18:07 Hapag-Lloyd changes terminals at Genoa on its MPS service
17:47 British Ports Association launch Sustainable Development Resolution
17:45 Euro Tank Terminal extends jetty at the port of Rotterdam
17:31 MEYER WERFT holds float out procedure for cruise ship for AIDA Cruises
17:29 APM Terminals launches online customer platform in Bahrain
17:27 MED MARINE delivers a 24m ASD Tug from Turkey to Estonia
16:24 Offshore installation vessel starts work on Belgium’s largest offshore wind farm
15:44 Logistec Corporation declares quarterly drvidends on shares
15:21 Vessel Performance Optimisation Forum Singapore initial speakers announced
15:02 Danaos Corporation announces closing of comprehensive debt refinancing
14:16 Sea Port St. Petersburg earmarked over $337,000 for bonus and social responsibility programmes
14:13 TTS Group ASA secures new contracts for access equipment and cranes for two reefer vessels
14:06 Ports of Primorsk and Ust-Luga support green shipping, to implement incentives for LNG-powered ships as from August 15, 2018
13:39 Bunker prices in Far East seaports edge down
13:14 ExxonMobil is first to supply via an independently accredited MFMS in ARA
13:10 Port of Brisbane announce a successful bid for funding of Heavy Vehicle Safety Around Ports project
12:13 HHLA posts operating result for H1 2018
11:29 Rosterminalugol’s seven-month coal throughput hits the 13-million tonne mark
11:11 Crude oil futures price rises to $73.28 (London) and $67.81 (New York)
11:01 Diana Shipping announces continuation of time charter contract for m/v Protefs and a new time charter contract for m/v Nirefs with Hudson
10:58 GeoSea has taken delivery of self-propelled DP2 jack-up vessel ‘Apollo’
10:09 Safe Bulkers announces acquisition of a Capesize class dry-bulk vessel
09:30 Consolidated Marine Management selects ABS Advanced Solutions Enterprise Asset Management
09:14 Baltic Dry Index gains 18 points edging up to 1800pts mark
09:00 ABP to develop new technologies with Rolls Royce and Svitzer

2018 August 13

18:41 Port of Helsinki seven-month volume grows 10% to 8.88 million tonnes
18:27 Russian Gov’t to lend a helping hand to BAM and Transsib modernization project
18:23 HII awarded advance planning contract for CVN 74 RCOH
17:54 Nord Stream 2 submits application and EIA for an alternative route in Denmark
17:47 Board of Harbor Commissioners promotes Casey Hehr as Port of Long Beach Security Director
17:42 NYK to participate in demonstration project to remotely operate a ship
17:15 VT Halter Marine, Inc. launches VDOT's new ferry Powhatam
16:43 Swire Seabed's Seabed Worker commences new project with the Norwegian Petroleum Directorate (NPD) to collect seabed data in the Norwegian Sea
16:38 Spot market price for Russian M100 product ended last week higher at nearly RUB 18,000 / pmt
16:24 RKS-ENGINEERING chosen as the Krasnoyarsk Dam Shiplift overhaul project contractor
15:19 Cammell Laird launches Leander Frigate website following worldwide interest
15:03 Sea Port of St. Petersburg spends RUB 15,8 mln on OH&S programmes
14:05 Yang Ming named Provider of the Year 2018
13:43 PortNews to host live webcast of Marine Robotics: Laws, Applications, Technologies Roundtable, in Moscow and Vladivostok, August 24