• 2018 February 15 16:57

    Bunker market in anticipation of upward correction

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil prices fell significantly during the week. The latest selloff is the result of both oil-specific problems as well as equity market volatility. The rebound in the dollar and the stock market meltdown have pushed down oil/fuel indexes. Meantime, the surge in U.S. shale production to over 10.27 million barrels per day (bpd) last week, plus expectations of output growth to 11 million bpd later this year, have inspired fears of a return to surplus. Those concerns were supported by a massive increase in the U.S. rig count last week:  plus 26 oil rigs, boosting the count to 791, the highest since April 2015.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) also demonstrated a steep decline in the period of Feb.08 - Feb.15:
        
    380 HSFO - down from 357.71 to 351,86 USD/MT (-5.85)
    180 HSFO - down from 395,07 to 390,79 USD/MT (-4.28)
    MGO         - down from 614.71 to 597,64  USD/MT (-17.07)


    The International Energy Agency (IEA) said in its latest Oil Market Report, that the global oil market could slip into deeper oversupply on the back of non-OPEC production growth led by the United States. At the same time, global economic growth could turn out to be stronger than previously expected and this would help offset the impact of growing U.S. production on prices. The IEA maintained its 2017 oil demand growth estimate at 1.6 million bpd and said this year demand will grow by 1.4 million bpd, a 100,000-bpd upward revision on the January Report's estimate.

    A bit earlier the EIA published its latest Short-Term Energy Outlook, in which it drastically revised its forecast for U.S. oil production, predicting the country will hit 11 million bpd by the end of 2018, a year earlier than it previously thought. Surging output threatens to push down oil/fuel prices further. The EIA sees Brent averaging $62 per barrel in 2018, and WTI to average $58.

    Goldman Sachs in turn considers that market upward movers such as global economic growth projections, the possibility of supply disruptions, and discipline among U.S. producers still remains (although there were some misgivings about the last factor). The bank also pointed out that despite market's wariness about U.S. oil production growth, long-term car sales projections for the Chinese market as well as forecasts on crude oil demand in the United States provided support to oil/fuel price optimism.

    OPEC's total crude oil production averaged 32.30 million bpd in January (down by 8,100 bpd from December) as rising production in Iraq, Saudi Arabia, and Libya did not fully offset an-other massive plunge in Venezuela's production and a small decline in Angola. Venezuela's crude oil production in January 2018 was at 1.600 million bpd, down by 47,300 bpd compared to December 2017: the largest monthly decline in oil production among OPEC's 14 member states. Among the OPEC members that raised their production, Iraq was the leader with an in-crease of 30,200 bpd in January over December, to 4.435 million bpd (higher than quota under the deal-4.351 million bpd).

    The Organization of the Petroleum Exporting Countries (OPEC) also said it expected world oil demand to climb by 1.59 million barrels per day (bpd) this year, an increase of 60,000 bpd from the previous forecast, reaching 98.6 million bpd. As per OPEC, non-OPEC supply will also rise by 1.4 million bpd this year, an upward revision of 250,000 bpd from last month's forecast. The revision is rather large and represents an acknowledgement that the cartel's efforts to limit production have allowed U.S. shale to ramp up. Cartel expects, that in the situation of non-OPEC production growth, oil markets would only return to a supply and demand balance to-wards the end of this year.

    Iran's Energy Minister said last week the country has the capacity to increase production by 100,000 bpd within five to six days of an end to the production cut deal. It was also said that there is no reason for OPEC to extend the cuts beyond June this year. The statement added pressure to fuel indexes.

    The EIA forecasts the United States will become a net oil and gas exporter by 2022: slower domestic demand, along with growth in natural gas, oil, and oil product production will drive the transformation. The report does not detail the main destinations for these exports, but China and India are both likely to be top consignees for both oil and gas. The United States will continue to import crude oil as well, as its refineries need different blends to process into fuels; the heavy grades that go into these blends are typically imported

    The budget deal that the U.S. Congress reached on Feb.07 includes the sale of 100 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) between 2022 and 2027-a total volume equal to some 15 percent of the current reserve. The budget deal also involves the sale of $350 million worth of crude oil, or some 5.7 million barrels, this year. Currently, the SPR has around 665.1 million barrels of crude oil stored in underground caverns on the coasts of Texas and Louisiana.

    Сrude oil imports to China hit another record last month, reaching 9.57 million barrels daily, for a total of 40.64 million tons. This is 400,000 bpd more than the previous record from March last year. A Rosneft pipeline began operating at an expanded capacity on January 1, which increased the flows of crude into the country. Besides, the increase in oil imports was driven by independent refiners, who rushed to utilize their higher crude oil quotas, that were 55 percent higher than last year's. It forecasts that Chinese crude oil imports will continue to grow over the next few years as the use of oil products grow along with the economic and refinery capacity expansion. The country's import dependence is also expected to grow as imports rise and production de-clines.

    China also plans to launch its crude oil futures contract on March 26: a move that will potentially influence pricing of the global fuel market. The launch is aimed at giving the country more levers in pricing crude in Asia. The move would also support China's currency and its role in the global financial system. The creation of the yuan-denominated contract was originally expected about six years ago but has run into delays as turmoil in China's stock markets and other commodity futures raised concerns about its capacity to handle financial turbulence.

    The fuel market seems poised for a price correction amid rising supplies, financial turmoil and active positioning from hedge funds in the futures market. Inventories are back close to average levels and it looks that OPEC could overshoot and tighten the market too much. But a price correction doesn't mean that the market will settle in at lower prices for a long time. Demand is rising and OPEC will likely maintain high levels of compliance with its production limits. We expect bunker prices may continue slight downward evolution next week while upward correction is rather possible in the near term.

     

     

     

     

     

     

     

     

    * 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 September 18

18:09 Cruise ships called Saaremaa Harbour nine times during the summer season
17:52 Arctic units of RF Navy’s Northern Fleet hold amphibious assault training at Chukotka coast
17:27 Annual Advanced Course on Port Operations and Management held in France on 10-12 September
17:04 Maersk Line announces rates from Europe & Mediterranean to West Africa
16:50 Marinet Conference gathered more than 500 on-site and virtual participants
16:21 Drilling rig supply ship of Project 22420, Ostap Sheremet, left Amursky Shipyard for outfitting and testing
16:04 Maersk Line announces new Bunker Adjustment Factor (BAF)
15:34 NYK participates in Japan Climate Initiative
15:04 6 MOL-operated/managed vessels earn commendations from Japan Coast Guard Regional Headquarters
14:30 Yang Ming launches new container vessel 'YM Wellbeing'
14:16 Throughput of Chinese ports grew by 4.1% to 6.15 billion tonnes in 8M’18
14:03 PORT OF KIEL restructures Ostuferhafen access area
13:52 RS gains ISO 9001:2015 Certificate
13:28 Kolmar to export up to 40 million tonnes of coal per year via a terminal under construction in the Muchke Bay
13:04 Throughput of port Kaliningrad in 8M’18 grew by 6% Y-o-Y to 9.6 million tonnes
12:40 Okskaya Sudoverf takes part in Global Fishery Forum and Seafood Expo 2018
12:17 Throughput of port Shanghai (China) declined by 1% to 372.85 million tonnes in 8M’18
11:55 Fuel oil prices show no significant changes in the Far East ports of Russia (graph)
11:31 Throughput of port Vyborg in 8M’18 up 23% Y-o-Y to 1.15 million tonnes
11:09 Diana Shipping aqnnounces time charter contract for m/v Artemis with Ausca
10:48 Throughput of port Primorsk in 8M’18 fell by 11% Y-o-Y to 35.79 million tonnes
10:30 Throughput of port Vysotsk in 8M’18 declined by 3% Y-o-Y to 12.07 million tonnes
10:09 Georgia Ports Authority approves $92M rail expansion
09:52 Brent Crude futures price down 0.55% to $77.62, Light Sweet Crude – down 0.44% to $68.39
09:43 ABS Global Gas Team awarded classification contract for Singapore's first LNG bunker barge
09:33 Krasnoye Sormovo shipyard delivers Pola Feodosia, fourth dry cargo carrier of Project RSD59
09:15 Baltic Dry Index is down to 1,357 points
08:17 GTT and Keppel Offshore & Marine sign a license agreement for the construction of membrane tank solutions
07:36 Bureau Veritas issues approval for GTT’s new NO96 Flex cargo containment system

2018 September 17

18:04 Maersk Line announces rates from Indian Subcontinent and Middle East to Mediterranean
17:50 ICS launches free guidance on preparing for 2020 sulphur cap
17:23 Throughput of port Ust-Luga in 8M’18 declined by 5% Y-o-Y to 64.49 million tonnes
17:04 Maersk Line announces rates from Europe & Mediterranean to West Africa
16:35 Cheniere and Vitol sign 15-year LNG sale and purchase agreement
16:04 Port of Piraeus establishes partnership with Port of Guangzhou
15:30 Keppel delivers its second LNG-powered vessel to Keppel Smit Towage Singapore
15:12 Maersk Line announces rates from Far East Asia to West Africa
14:58 HHLA floating crane loads world’s biggest ship propeller onto a vessel at the Port of Hamburg
14:50 Throughput of Port St. Petersburg up 12% to 39.39 million tonnes in 8M’18
14:23 Training for reducing emissions in ports held in Georgia
14:01 Incheon Port Authority signs agreement of 'Formation of eco-friendly port' with UNEP
13:36 Wärtsilä wins world’s first ‘LPG as fuel’ order for new generation of innovative gas carriers
13:12 GTT receives an AiP from Bureau Veritas for the development of its new cargo containment system (CCS) NO96 Flex
12:50 Registration opens for SMi’s 4th annual Maritime Reconnaissance & Surveillance Technology conference
12:31 Maersk to change fuel adjustment surcharge ahead of the 2020 sulphur cap
12:05 Super Luxury MV Viking Orion calls Colombo
11:57 Average wholesale prices for М-100 HFO up to RUB 20,404 in RF spot market
11:24 Bunker sales at the port of Singapore in 8M’18 down 1% Y-o-Y to 33.35 million tonnes
11:19 DNV GL starts phase II of project to examine the impact of phase-contamination on oil flow meters
11:03 Port of Singapore throughput in 8M’18 grew by 1.2% Y-o-Y to 418.62 million tonnes
10:46 Valencia Containerised Freight Index up 8.19% from January to August 2018
10:41 Throughput of port Helsinki (Finland) in 8M'18 up 8.9% Y-o-Y to 7.67 million tonnes (table)
10:18 The Maritime Standard reveals finalists for 2018 Awards
09:56 Brent Crude futures price down 0.12% to $78, Light Sweet Crude – down 0.07% to $68.72
09:34 Port of HaminaKotka throughput in 8M’2018 up 14.3% Y-o-Y to 10.9 million tonnes
09:15 Baltic Dry Index is down to 1,366 points
08:07 Newcastle welcomes ro-ro shipment for Newcastle Light Rail project
07:05 U.S. Port of Corpus Christi resumes normal operations

2018 September 16

13:59 GTT presents its latest technological innovations and related services during Gastech 2018 in Barcelona

2018 September 15

07:22 Port of Oakland night gates will expand to speed up cargo flow