• 2018 March 22 18:18

    Global fuel market to remain relatively stable next week, expert says

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes demonstrated slight irregular fluctuations in the end of last week but have climbed at the start of this week on Middle East tension, falling production in Venezuela, a weakening of the U.S. dollar and an unexpected decline in the U.S. crude oil inventories by 2.6 million barrels.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) demonstrated firm upward trend as well in the period of Mar.15 – Mar.22:
        
    380 HSFO - up from 354.79 to 370,57 USD/MT (+15.78)
    180 HSFO - up from 395,00 to 408,43 USD/MT (+13.43)
    MGO    - up from 602.00 to 626,14 USD/MT  (+24.14)

    The International Energy Agency (IEA) reported the first increase in OECD commercial stocks since July, but the 18-million-barrel increase was only half the usual level, and the surplus to the five-year average dropped to 53 million barrels as of January 2018. The IEA also predicted global oil demand would pick up this year, but supply is growing at a faster pace, which should boost inventories. The agency raised its forecast for oil demand this year to 99.3 million barrels per day (bpd) from 97.8 million bpd in 2017, and said it expected supply from non-OPEC nations to grow by 1.8 million bpd in 2018 to 59.9 million bpd, led by the United States.

    According to OPEC’s latest Monthly Oil Market Report, preliminary data for January also showed that total OECD commercial oil stocks rose by 13.7 million barrels from December, reversing the drop of the last five months. At 2.865 billion barrels, OECD stocks were 206 mil-lion barrels lower than in January 2017, but 50 million barrels above the latest five-year aver-age.

    Besides, OPEC sharply revised up its forecast for U.S. shale growth this year, an admission that rival non-OPEC production is set to growth significantly. The group said the U.S. would produce 260,000 bpd more than previously thought, and that total global supply would rise faster than demand this year.

    Goldman Sachs in turn says that oil demand remains robust, shale drillers actually showing some relative restraint when it comes to new drilling, and OPEC continues to post high compliance rates with their production limits. That will likely push inventories well below the five-year average by the third quarter. Because there is such wide variation in expectations for oil prices, many shale companies have locked in hedges to at least offer some certainty.

    While the oil futures curve has been in a state of backwardation for much of the past two months, the curve has recently flattened out and the spread for the first two crude contracts is narrowed to switching from backwardation to contango. The return of a contango would likely cause oil/fuel trading to become more volatile, and perhaps could push spot prices down.

    Russia confirmed it would continue to comply with the OPEC oil production cut deal until the deadline set in the extension agreement last November and even into 2019 if need be. It was also noted that the best approach to ending the deal would be a gradual withdrawal, which could begin in the second half of this year, so discussions of the exit strategy of the partners in the deal could take place at their meeting in June.

    Saudi Arabia dismissed concerns of a fraying OPEC deal, stating that the country would re-main committed to the production limits this year. The response came after the Iranian oil min-ister suggested his country wanted to ramp up production. However, Saudi Aramco said that its output would remain below 10 bpd. That statement was unusual because the company typically does not publish what it will produce ahead of time.

    Tensions between Saudi Arabia and Iran also gave fuel prices some support. Saudi Arabia called the 2015 nuclear deal between Iran and world powers a flawed agreement. The U.S. President Donald Trump earlier has threatened to withdraw the United States from the accord be-tween Tehran and six world powers, raising the prospect of new sanctions that could hurt Iran’s oil industry. The UK, France and Germany are considering new sanctions on Iran as well as a way of softening the concerns of the Trump administration, hoping to keep the U.S. in the nu-clear deal with Iran.

    Libya suffered some temporary setbacks last week at a few oil projects, but the country’s output has proved resilient. The IEA reported that Libya’s output was steady and looks set to hold onto recent gains. Country’s production has held up at about 1 million bpd for nearly six months.

    Worries about falling production in Venezuela (output has been halved since 2005 to below 2 million bpd due to an economic crisis), also supported fuel markets. The International Energy Agency said last week Venezuela was vulnerable to an accelerated decline. Such a disruption could tip global markets into deficit.

    U.S. drillers added 4 oil rigs last week, bringing the total count to 800. It was the seventh U.S. rig count rise in eight weeks. Due to the high drilling activity, U.S. crude oil production has risen by more than a fifth since mid-2016, to 10.407 million bpd, pushing it past top exporter Saudi Arabia.

    Soaring U.S. output, as well as rising output in Canada and Brazil, is undermining efforts led by the OPEC and Russia to curb supplies and bolster prices. Amid Russia’s efforts to restrain out-put, Rosneft Company said on Mar.19 that its fourth quarter 2017 liquid hydrocarbon production reached 56.51 million tonnes, raising its full-year output by 7.3 percent to 225.5 million tonnes, or 4.53 million bpd.

    U.S. crude oil exports are surging and going to a growing number of buyers around the world, including to the fastest-growing demand centers in Asia. This year, it looks like three key drivers of American exports: higher production, higher capacity, and higher WTI-Brent discount, will lead to a continued increase in overseas shipments. The U.S. shipped its oil to 37 countries last year, up from 27 in 2016. In 2017, the second full year since the restrictions on U.S. crude oil exports were removed in late 2015, American oil exports almost doubled compared to 2016, averaging 1.1 million bpd and slowing down rebalancing process in global fuel market.

    Ageing fields and high production costs dragged down China’s domestic crude oil production in January and February. During this period China’s crude oil production dropped by 1.9 per-cent from the same period last year to average 3.76 million barrels per day. The declining domestic production and the higher refinery runs highlight the fact that China is growing increasingly dependent on oil imports and is increasingly influencing global oil trade and markets. In addition, production from assets that Chinese state oil companies own abroad now exceeds domestic production, increasing the country’s dependency on foreign oil.

    We expect global fuel market will be in a state of a relative stability next week, and so bunker prices may have a chance to continue moderate upward evolution.

     

     

     

     

     

     

     

    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 20

21:17 Expert says production declines and geopolitical unrest may push bunker prices up
18:02 SITC holds naming & delivery ceremony for M/V “SITC TOYOHASHI”
17:54 Sovcomflot participates in Eastern Economic Forum’s business programme
17:30 Kurt Bodewig appointed as new European Coordinator for Motorways of the Sea
17:07 Port of Singapore holds annual multi-agency ferry emergency exercise
16:46 IAPH regional conference sets pan-African ports agenda
16:25 UAE to host Dubai Marine Insurance Conference 2018 on November 20-21
16:07 Governments of New Zealand and Australian announce fumigation requirement for import cargos
15:48 Sovcomflot is a Partner of the Second Conference “LNG Fleet and LNG Bunkering in Russia”
15:32 NYK product tanker rescues 28 fishermen off the coast of Colombia
15:04 CMA CGM announces GRR from Asia to West Africa
14:56 Admiralteiskie Verfi launches the Kronshtadt, diesel-electric submarine of Project 677
14:32 DNV GL releases autonomous and remotely operated ship guideline (UPDATE)
14:04 Port of Long Beach awarded $4.2 mln security grant
13:32 ABS supports innovative yacht design with dedicated guidance notes and software
13:20 Finnish Transport Agency: international seaborne transport volumes show significant boost
13:04 Port of Antwerp works on structural solutions to improve mobility
12:43 Arctic group of RF Navy’s Northern Fleet enters Chukchi Sea through Bering Strait
12:30 Wison receives AiP from LR for 300MW FSRP
12:04 Port of Rotterdam and Rönesans Holding sign agreement for petrochemical industrial zone in Turkey
11:49 IMO to start consideration of legal framework for low-flashpoint diesel
11:30 Gulftainer signs 50-year, $600 million concession to operate and expand Port of Wilmington in Delaware, USA
11:18 Fuel oil prices are going up the Far East ports of Russia (graph)
11:04 Green Corridor JIP delivers innovative bulk carrier designs for a low emissions future
10:55 IMO takes important step to facilitate use of methanol
10:30 HHI receives AiP from LR for a VLGC design capable of using LPG as fuel
10:19 Brent Crude futures price up 0.3% to $79.64, Light Sweet Crude – up 0.61% to $71.2
10:03 OpenIJ starts sinking operation of the lock gate chamber at the Port of Amsterdam
09:50 Passenger Port of Saint-Petersburg ("Marine Façade") welcomed MSC Meraviglia
09:34 CMA CGM announces GRR from India to East Africa
09:17 Baltic Dry Index is up to 1,373 points
09:03 Port of Rotterdam organises information meeting about the replacement of Maaskade quay wall
08:34 DNV GL launches revised design standard and new certification guideline for floating wind turbines
08:04 ABS issues AIP for Jiangnan’s LNG Jumbo

2018 September 19

18:10 Significant reserve growth confirmed at the Utrenneye field
17:53 Green Corridor JIP delivers innovative bulk carrier designs for a low emissions future
17:35 Rolls-Royce launches new range of powerful medium speed V-Engines
17:05 Sembcorp Marine, ABS and A*STAR’s Institute of High Performance Computing team up to develop new gas technologies in offshore, marine and energy sectors
16:35 Valenciaport presents its cruise offer in Lisbon under the slogan “Valencia dresses in green”
16:16 Vladimir Panchenko dredger built for Lena Basin is put into operation
16:04 MOL launches new large-scale ferry Sunflower Kirishima
15:47 Freeport of Riga Authority begins active cooperation with its Chinese partners
15:23 Vancouver Fraser Port Authority joins leading port authorities in climate action program
15:04 DFDS to invest DKK 300m to install scrubbers on 12 freight ferries deployed on freight routes in the Mediterranean
14:50 Maersk to combine Damco’s Supply Chain Services and Maersk Line’s Ocean Product on January 1st, 2019
14:22 NOVATEK and Fluxys apply for establishment of a joint venture in Rostock, Germany
14:08 Stevedoring unions announce a strike in the ports of Leixoes and Lisbon
13:08 Noble Group completes the sale of the Panacore vessels
12:47 Bunker prices are going down at the Port of Saint-Petersburg, Russia (graph)
12:29 Nevsky Shipyard took part in II International Fishery Forum and Expo 2018
12:07 ABS holds seminar series exploring gas as marine fuel
11:50 Azerbaijan Caspian Shipping Company has it towing and supply vessel Nercha overhauled at Bibiheybat shipyard
11:25 Klaipeda Seaport takes part in exhibition and conference in Kazakhstan
11:07 San Pedro Bay Ports ready cleaner truck rules for Oct. 1 2018
10:46 Record number of ships registered at Freeport of Riga in August
10:28 Container throughput of port Hong Kong (China) down 4.3% to 13.15 million TEUs in Jan-Aug’18
10:07 Austal awarded littoral combat ships 32 & 34
09:43 Brent Crude futures price down 0.06% to $78.98, Light Sweet Crude – down 0.03% to $69.57
09:19 Baltic Dry Index is down to 1,356 points
09:05 Port of Oakland to add electric trucks thanks to state grant