• 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 April 25

15:30 Volga Shipping Company opens navigation on the Upper Volga river
15:14 MOL expands its NVOCC business with the unified brand "MOL Worldwide Logistics"
15:06 BWMS manufacturers and stakeholders set up new association BEMA
14:55 Innovative Damen RSD Tug 2513 kicks-off introduction tour in Italy
14:09 Ilari Kallio appointed Chief Digital Officer at Konecranes
13:20 Nakilat records 13% increased profits for the first quarter of 2018
12:59 Philippines accedes to air pollution and energy efficiency rules
12:33 Cruise season begins at the Port of Gdansk
12:09 HELCOM progresses firmly towards reducing input of pollutants into the Baltic Sea
11:51 8,791 ships are fitted out with the GLONASS navigation equipment - Dmitry Rogozin
11:28 All seaports in Crimea will be fully equipped with GLONASS system in 2018 - Dmitry Rogozin (photo)
11:09 Keppel Offshore & Marine signs MOU with MPA and TCOMS to jointly develop autonomous vessels
10:50 LUKOIL BoD recommends dividend distribution for 2017 in the amount of RUB 215 per ordinary share
10:26 Brent Crude futures price up 0.08% to $73.8, Light Sweet Crude – down 0.13% to $67.61
10:09 WinGD wins marine propulsion Emissions Reduction Award
09:45 Bunker prices are going up at the Port of Saint-Petersburg, Russia (graph)
09:20 Baltic Dry Index up to 1,306 points
09:08 The Port of Rotterdam welcomes IMO’s first step in reducing CO2 from shipping
08:17 Keppel on track to deliver South East Asia’s first LNG powered tug

2018 April 24

18:43 GAC South Africa expands into Port Elizabeth
18:29 Summa Group and Rosneft denied holding negotiations on Novorossiysk Commercial Sea Port
17:30 Future perspectives for maritime industry to be studied at Maritime Future Summit (MFS) during SMM
17:06 PSA and GeTS to develop new global trade facilitation & supply chain platform “Calista™”
16:47 Safety and innovation on the agenda for Danish Maritime Days
16:26 Fincantieri delivers FREMM “Federico Martinengo” to the Italian Navy
16:04 British Ports Association calls for funding commitments to deliver on welcome first steps on port connectivity
15:35 NIBULON transports Ukrainian metal by water
15:04 STASCo signs contract with BMT for navigation simulator REMBRANDT
14:37 ESPO applauds EU role in achieving the IMO agreement on CO2 reduction target for shipping
14:28 Tallink Group’s consolidated revenue in 2017 amounted to EUR 967.0 million
14:04 Seafarer issues to be highlighted during 105th session of IMO's Legal Committee
13:32 HHLA to strengthen and expand its intermodal activities through its rail subsidiary Metrans
12:56 Bunker prices are going down at the Far East ports of Russia (graph)
12:33 Aleksey Kadilov elected as Director General of Baltiysky Zavod (photo)
12:09 US Federal Maritime Commission to examine trucking & delivery arrangements
11:45 Russia’s General Board of State Expert Review approves yet another phase of project on construction of Zvezda shipyard (photo)
11:09 CMA CGM announces GRR from Asia to East Africa
10:45 Foreship takes world’s leading CFD simulation software, StarCCM+ into use
10:30 ABP shortlisted for two Humber Renewables Awards
10:22 Brent Crude futures price down 0.04% to $74.03, Light Sweet Crude – down 0.13% to $68.31
10:08 Nakilat is the first company in Qatar certified for ISO45001
09:39 Freeport of Riga Authority along with several port companies visited TransRussia 2018
09:17 Baltic Dry Index up to 1,306 points
09:08 Compensation regime for Hazardous and Noxious Cargoes a step closer - IMO
08:48 City of Antwerp and Antwerp Port Authority start urban mission to Moscow and St. Petersburg

2018 April 23

18:06 World’s largest short sea Ro-Ro vessel MV Celine christened at Dublin Port
17:52 Digital Ship’s Maritime Big Data Forum will be held on 29 May 2018 in Oslo
17:36 Ocean Rig announces agreement to postpone delivery of newbuilding drillship Ocean Rig Santorini
17:20 Construction of Bagayevsky hydrosystem begins in Rostov Region (photo)
17:05 ITF urges Hutchison Ports to improve global health and safety operations
16:35 Polskie LNG conduct a technical dialogue on extension of LNG Terminal in Świnoujście
16:29 Rosmorport’s icebreakers assisted over 5,700 vessels in freezing seaports of Russia this winter navigation season
16:05 Hapag-Lloyd plans 20 percent reduction in CO2 emissions by 2020
15:55 Azerbaijan Caspian Shipping Company to provide additional scholarships for students
15:33 TransContainer’s net profit in QI’2018 increased by 19.5% Y-o-Y to RUB 1.479 million
15:04 M.v. Tucana delivers fibre optic cable baskets from Drammen (Norway)
14:47 Port of Gdansk (Poland) throughput up 44% to 12.7 million tonnes in January-March 2018
14:31 Average wholesale prices for М-100 HFO in RF spot market up to RUB 13,542 per tonne
14:10 ICTSI PNG units ink union agreements
13:59 MOL сrude oil tanker rescues a castaway in the South China Sea