• 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 July 16

15:32 Maersk Drilling secures two contract extensions in the North Sea
15:19 Container throughput of port Hong Kong (China) down 3.6% to 9.88 million TEUs in Jan-June’18
15:03 Van Oord will acquire MPI Offshore
14:44 Average wholesale prices for М-100 HFO down to RUB 17,589 in RF spot market
14:35 Wärtsilä to assist Transocean with thruster maintenance optimisation and dry-docking cost reductions
14:25 Jan De Nul Group acquires part of MPI’s offshore business unit
14:11 Fednav accepts delivery of MV Federal Dee, its 60th owned vessel
13:46 Eastern Shipbuilding inks contract with Bisso Offshore for RApport 2400 Ship Handling Tug duo
13:27 Azerbaijan Caspian Shipping Company’s fleet is involved in a new international project
13:07 Court dismisses EUR 9 million claim against Armada Seismic Invest II AS
13:06 Hong Kong will host ShipTek Ship Owning & Ship Management Conference & Awards on 30 August 2018
12:48 Marine Recruiting Agency takes on a project of training crane specialists in Estonia
12:23 SEACOR Holdings announced that it favors a business combination of Dorian LPG LTD. and BW LPG Limited
12:02 IMO head highlights key maritime issues during trip to China
11:46 Rosmorport appoints Igor Glukhov as Deputy Director for Navigation Safety of its Far East Basin Branch
11:25 Fincantieri contracted to build LNG-fueled pair for TUI Cruises
11:01 Baltic Dry Index up to 1,666 points
10:44 Brent Crude futures price down 0.5% to $74.96, Light Sweet Crude – down 0.64% to $69.5
10:25 Mexico benefits from IMO training on port security
10:02 IMO held port emissions training for Argentina
09:52 CMA CGM's FAK rates for Asia to Red Sea trades
09:40 Bunker sales at the port of Singapore in HI’18 up 1.7% Y-o-Y to 25.35 million tonnes
09:18 Port of Singapore throughput in HI’18 grew by 0.8% Y-o-Y to 312.79 million tonnes

2018 July 15

11:24 MAN Energy Solutions ready for SMM 2018
10:43 CMA CGM informs of FAK rates from the Indian Subcontinent to North Europe and the Mediterranean

2018 July 14

12:40 CMA CGM announces GRR for Far East to East Africa trade
11:41 ABP: Container terminal operation expansion to meet growing demand
10:14 Navtek selects Corvus Energy to provide battery for the world's first all-electric tug

2018 July 13

18:50 YILPORT Holding submits offer for Taranto Container Terminal concession
18:12 Metal Shark and ASV Global introduce “Sharktech” Autonomous Vessels
17:48 ABP: £2.7 million lock gate project secures future of Newport docks
17:16 Golar LNG Partners completed acquisition of equity interest in Golar Hilli, owner of FLNG Hilli Episeyo
16:48 Total closes acquisition of Engie’s upstream LNG business and becomes world No2 LNG player
16:36 Norwegian Cruise Line confirms options for two more Leonardo-class cruise ships
16:25 Russian Minister of Natural Resources and Environment Dmitry Kobylkin visited SCF headquarters
15:59 Upgraded vessels of Project 14200 started navigation on passenger routes in Ob-Irtysh basin
15:33 Draft law on closed zones for dry bulk cargo transshipment submitted to State Duma (document)
15:12 Wärtsilä signs a EUR 170 million scrubber deal
14:37 Draft law on development of cruise tourism in Russia’s Arctic and Far East submitted to State Duma
14:24 Weatherdock AG offers fishing sector a solution to support the fight against IUU
13:49 Damen supporting European shipbuilding with NAVAIS coordination
13:11 USCG postpones underwater assessment of WWII tanker Coimbra
12:40 A £2.7 million lock gate project secures future of Newport Docks
12:11 Hapag-Lloyd to apply season surcharge for NEC to WCSA trade
11:49 London will host 9th Maritime Salvage & Casualty Response Conference on 12-13 September 2018
11:27 Hapag-Lloyd's PSS for North Europe - Caribbean, Central America trade
11:03 Throughput of port Kaliningrad in 6M’18 up 9% Y-o-Y to 7.20 million tonnes
10:38 Brent Crude futures price down 0.24% to $74.27, Light Sweet Crude – up 0.07% to $70.38
10:24 Hapag-Lloyd to apply Peak Season Surcharge for North Europe - ECSA trade
10:00 Bunker prices are going down at the Port of Saint-Petersburg, Russia (graph)
09:36 Throughput of port Tallinn (Estonia) up 1.4% to 10.09 million tonnes in HI’18
09:17 Baltic Dry Index up to 1,632 points

2018 July 12

18:21 Port of Los Angeles partners with Port of Antwerp to host simultaneous int'l "Hackathon"
18:09 DP World reiterates Validity of Doraleh Container Terminal Concession and Exclusivity Rights
18:03 High volatility in global bunker market, expert says
17:59 Throughput of port Vyborg in 6M’18 up 28% Y-o-Y to 781,200 tonnes
17:36 Maersk Supply Service completes tow of semi-submersible
17:19 Hapag-Lloyd announces port call change of Mediterranean Canada Service (MCA)
17:10 Throughput of port Primorsk in 6M’18 down 15% Y-o-Y to 26.76 million tonnes
16:45 Zelenodolsk Plant Named After M. Gorky lays down yet another small-size missile ship of Project 21631 for RF Navy