• 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 December 12

19:08 Hapag-Lloyd announces General Rate Increase from East Asia to USA and Canada
18:30 MEYER WERFT handed over AIDAnova to AIDA Cruises
18:21 IMO led panel discussion on wreck removal challenges at Salvage & Wreck Removal Conference in London
18:00 Rosneft develops innovations for Russian Zvezda super-shipyard
18:00 Newbuilding methanol carrier for Proman Shipping named CASTARA
17:46 Damen signs with Port Nelson for ASD Tug 2411
17:37 Almaz shipyard lays down icebreaker of Project 21180М, Yevpaty Kolovrat, for RF Navy
17:14 Comprehensive plan for NSR development to be ready by February 2019 – Yevgeny Ditrikh
16:49 Investments in the Arctic by 2024 estimated at RUB 5.5 trillion - Dmity Kobylkin
16:23 Vladimir Putin orders to look into creation of port SEZ at Olya port in Arkhangelsk Region
15:50 Throughput of Russian seaports in 11M’18 grew by 4.2% Y-o-Y to 746.8 million tonnes (detalization)
15:26 Okskaya Sudoverf launches first dry cargo carrier of Project RSD32M
15:02 American Petroleum Institute (API) awards bolt fatigue testing program contract to DNV GL
14:25 Giant Octopus added to the CPC’s stock of ER equipment
14:01 London hosts global port environment experts
13:20 Pola Anatolia, dry cargo ship of RSD59 design, successfully passed sea trials
13:01 Newcastle Container Terminal to deliver savings for regional NSW
12:36 Sovcomflot BoD considered the Group’s financial plan for 2019 and a forecast for 2020-2021
12:01 Diana Shipping announces time charter contract for m/v Ismene with Koch
11:49 Yury Trutnev appointed as head of revised State Commission for Arctic Development
11:22 Three icebreaker escort operations performed in eastern part of Gulf of Finland during 24 hours on December 11-12
11:00 COSCO SHIPPING Ports partners with Abu Dhabi Ports to create regional trading hub and Middle East gateway for Belt and Road
10:47 Throughput of Rostov-on-Don port in 11M’18 up 15% Y-o-Y to 22.9 million tonnes
10:20 Brent Crude futures price up 1.16% to $60.9, Light Sweet Crude – up 0.67% to $52.3
10:11 Full bonded area is opened in Port Bronka
10:01 WMU welcomes ITF General Secretary and President
09:59 GTT receives an order for the tank design of two new LNG carriers
09:44 Bunker prices continue going down at the Port of Saint-Petersburg, Russia (graph)
09:16 Baltic Dry Index is down to 1,364 points
08:28 Boskalis Ndurance’ cable trencher successfully tested at Alexiahaven
08:05 Maritime Blockchain Labs announces new consortium to improve crew management

2018 December 11

17:59 ASW Severomorsk of RF Navy's Northern Fleet makes a call to the Republic of Djibouti
17:33 Diesel submarine of RF Navy’s Pacific Fleet conducted training exercise in the Sea of Japan
17:10 Port of Antwerp International to consult USPA on tariff setting, concession and environmental policy
16:46 Van Oord supports the 6th Forum of Dredging Companies as its Sponsor
16:21 Yamal LNG reached full capacity
16:02 Hapag-Lloyd announces rates from Indian Subcontinent & Pakistan to North Europe
15:32 Georgia Ports Authority on track for 4.3M TEUs in 2018
15:20 Four new sponsors confirmed to join line-up at 2019’s Maritime Reconnaissance and Surveillance Technology conference
15:02 Hapag-Lloyd announces rates from Middle East to North Europe
14:48 Draft law on Arctic administration approved in the third reading by Russia’s State Duma
14:32 ECSA welcomes the decision by the EU Commission to update the EU list of ship recycling facilities
14:02 Global Ship Lease announces new long-term charter agreements with CMA CGM
13:32 Maersk Broker Bulk Chartering and Wonsild Dry to merge as of January 2019
13:15 Throughput of port Kavkaz in 11M’18 grew by 13% Y-o-Y to 45.61 million tonnes
13:02 COSCO SHIPPING Ports and Abu Dhabi Ports inaugurate CSP Abu Dhabi Terminal
12:46 Throughput of Russian seaports in 11M’18 grew by 4.2% to 746.81 million tonnes
12:13 Alfa Laval sells more than 100 GCU units for LNG newbuilds
12:01 Overseas Shipholding Group and American Shipping Company jointly announce extension of tanker charters
11:44 One icebreaker escort operation performed in eastern part of Gulf of Finland during 24 hours on December 10-11
11:40 The second phase of IMO-implemented safe and sustainable ship recycling project in Bangladesh starts
11:17 Bunker prices are flat at the Far East ports of Russia (graph)
10:58 NYK сoncludes long-term charter agreement for three LNG carriers with MC
10:30 MAN Cryo and partners develop marine liquid-hydrogen fuel-gas system
10:05 Port of Gdansk reports new quarterly record
09:39 Brent Crude futures price up 0.37% to $60.19, Light Sweet Crude – up 0.31% to $51.16
09:16 Baltic Dry Index is up to 1,385 points

2018 December 10

18:08 US major retail container ports imports reach 2 million containers in October 2018
17:50 Taganrog Sea Commercial Port spent USD 67,300 for its environmental programme in 9M’2018, up 6% YoY
17:27 Icebreakers of FSUE Rosmorport assisted 322 ships in navigation season 2018-2019