• 2018 April 5 22:48

    MABUX: The state of uncertainty could keep bunker prices in the phase of irregular changes

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have bounced back at the end of the quarter as geopolitical risk and OPEC's determination to further extend its production cut deal put a floor under prices. Mean-time, ongoing declines in Venezuela and concerns about heightened tension between the U.S. and Iran have significantly raised the risk premium for oil, even as some short-term factors recently pushed down prices.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) changed insignificant and irregular in the period of Mar.29 – Apr.05:
        
    380 HSFO - down from 367.50 to 366,14 USD/MT (-1.36)
    180 HSFO - down from 408,50 to 406,21 USD/MT (-2.29)
    MGO        - up from 631.14 to 633,79 USD/MT     (+2.65)

    Barclays forecasts a $51-per-barrel price on WTI by the third and fourth quarters of this year, and expects Brent to fall to $57 by the end of the year. As per Bank, recently, the oil market has been supported by supply disruption concerns due to geopolitical situation in the Middle East. However, while demand is being pushed up supported by global economic growth and geopolitical risk that threatens to remove more supply from the market, that short-term deficit will head into surplus again by the second half of the year, according to Barclays.

    As per some information circulating on the market, OPEC and Russia are looking at ways of institutionalizing their cooperation beyond the current production cut agreement, which may (or may not) expire at the end of this year. It was reported last week that both par-ties are working on solidifying their cooperation for the long-term. Besides, OPEC and its non-OPEC partners are reportedly considering an extension of the current production cut agree-ment for six months, through mid-2019.

    After three months of steady output, Russia’s crude oil production increased in March to 10.97 million bpd, the highest level since April 2017. The March production level showed the first increase since December 2017 and is slightly above Russia’s quota in the production cut deal. Russia’s pledge in the OPEC+ deal is to take away 300,000 bpd from its October 2016 level, which was the country’s highest monthly production in almost 30 years—11.247 million bpd. The Russian compliance with the OPEC/non-OPEC deal last month was at 93.4 percent. It was also noted, that Russia would continue to comply with the OPEC/non-OPEC deal until the end of this year and even into 2019 if need be.

    Iraq in turn has approved an increase in country’s crude oil production capacity to as much as 6.5 million bpd by 2022. This compares to a current production capacity of below 5 million barrels and production rates of around 4.4 million bpd as per its OPEC quota. This huge dependence on crude revenues has made Iraq the focus of doubts around compliance with the 2016 OPEC+ production cut deal, with many expecting that the cartel’s number-two producer will be the first to start cheating.

    One of the Saudi oil tankers was attacked on Apr.03 west of Hodeidah by the Iran-aligned Houthi movement. The attack was thwarted after one of the Arab coalition’s ships intercepted the attempt. Sustaining minor damage, the oil tanker completed its course. The Houthi Shiite rebel group has been fighting a Saudi-led coalition in Yemen since 2015. At the end of last year, they threatened that they would start attacking oil tankers and warships sailing under enemy flag if the Gulf coalition fighting it in the country does not reopen its ports. The geopolitical tension in the region has formed momentum support to the fuel prices.

    U.S. crude oil production hit a record, at 10.27 million barrels per day (bpd) last week. That puts the United States ahead of top exporter Saudi Arabia. Only Russia pumps out more, at 11 million bpd. The number of oil rigs in the United States decreased by 7 last week, for a total of 797 active oil wells in the US - a figure that is still 135 more rigs than this time last year.

     Three companies that purchased oil from the U.S. strategic petroleum reserve (SPR) have apparently complained that the oil contains dangerous levels of hydrogen sulfide (H2S). A concentration of H2S that is too high can corrode pipes and refineries. If there are broader problems with the quality of the remaining 665 million barrels placing in storage, it would make the U.S. strategic reserve much less effective as an energy security tool.

    China is imposing tariffs by up to 25 percent on 128 U.S. products, including steel and al-loy pipe for oil and gas, effective on Apr.02. The Chinese tariffs are seen as retaliation to last month’s U.S. tariffs on imported steel and aluminium—a 25-percent tariff on steel imports and a 10-percent tariff on aluminium imports—which U.S. President Donald Trump said he was imposing to address unfair global practices and to protect America’s steel and aluminium indus-tries. While U.S. manufacturers could see a limited impact on steel pipe in this round of Chinese tariffs on U.S. goods, the oil and gas industry is more vulnerable, because oil and gas pipelines import about three-quarters of the steel used to build projects in the United States.

    After Yuan-denominated crude oil futures were launched in China last week, another major step was taken to paying for crude oil imports in its own currency instead of U.S. Dollars. According to the proposed plan, Beijing would start with purchases from Russia and Angola, two nations which, like China, are keen to break the dollar’s global dominance. They are also two of the top suppliers of crude oil to China, along with Saudi Arabia. A pilot program for yuan payment could be launched as soon as the second half of the year. If China's plan to push the Petroyuan's acceptance proves successful, it will give China more power over global oil and fuel prices and will help the Chinese government in its efforts to internationalize yuan.

     HSBC reported that strong demand from Asia has meant that the LNG market has avoided the glut that many forecasts had predicted up until recently. In fact, the LNG market may face the opposite problem: by 2022-2023, there could be a shortage of supply, the result of a slowdown in spending on new projects. The HSBC’s conclusion closely echoes a recent report from Royal Dutch Shell, which warned of a brewing supply crunch in the 2020s due to a shortfall in project development.

    Still, there are a number of uncertainties that make rather difficult to forecast any further fuel trend. On the one part, if OPEC somehow abandons its cuts or begins a phase out sooner than expected, then fuel prices could slide significantly. But there are a number of upside risks as well. The most dangerous is the likely return of sanctions on Iran from the U.S. which, in worst case, may transform into military conflict. Another upside driver is a fall of Venezuela’s oil production. We suppose bunker prices may continue the phase of irregular changes next week while the market is looking for more considerable drivers.

     

     

     

     

     

     

     

     

    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 May 25

18:07 AIDAmira joins to the AIDA Cruises fleet
17:51 Azerbaijan Caspian Shipping Company cooperates with Columbia Shipmanagement to organize internship for ACSC 20 staff members
17:42 Carbon targets for shipping can only be met with ‘zero CO2’ fuels - ICS
17:40 IMO takes first steps to address autonomous ships
17:30 Marine Technics carried supplied marine pumps MT-Azcue for cargo vessels of different types
17:18 Container Terminal St. Petersburg in 1Q invested more than € 3.5 million in development, upgrade programme
17:04 Med Marine tugboat joins the company’s harbour fleet in Turkey’s Izmit Bay
16:59 Aleksandr Bryntsev appointed as Director General of Murmansk Shipping Company (photo)
16:25 Sovcomflot to provide technical supervision for the construction of Rosneft’s new LNG-fuelled tankers
16:04 Sanmar supplies a powerful tug to Forth Estuary Towage in Scotland
15:41 SMM advance press conference covered trends in SMMart Shipping
15:04 Seaspan accepts delivery of fourth 10000 TEU SAVER containership in four ship series
14:03 Port of Oakland online shipping platform goes live
13:33 MSC Splendida enters Busan Port
13:08 Klaipėda LNG terminal receives the 50th cargo
12:32 Transport and logistics sector of Latvia continues work with Chinese partners
12:03 Panama Canal nominated as finalist for Lloyd’s List’s Environment Award
11:50 Taganrog Sea Commercial Port handled 333,000 tonnes in QI’2018, up 4% Y-o-Y
11:24 Multipurpose Reloading Complex handled 1.02 million tonnes of cargo in QI’2018, down 20% Y-o-Y
11:03 Port of Amsterdam launches digital business guide
10:49 NOVATEK and TOTAL become partners in Arctic LNG 2 project
10:27 New Belgium container connection bolsters Port of Hull
10:11 Brent Crude futures price down 0.19% to $78.64, Light Sweet Crude – down 2.25% to $43.97
09:56 Bunker prices are slightly up at the Port of Saint-Petersburg, Russia (graph)
09:33 Baltic Dry Index up to 1,109 points
09:22 ITF backs US dock workers in dispute with port authorities
08:20 Port of Vancouver makes history with the arrival of the 25 millionth
07:18 First eleven companies participate in Nextlogic

2018 May 24

19:04 Coal to Vostochny Port to be transported on Kuzbass-Vostochny Port route by innovative rolling stock
18:07 ZIM posts Q1 2018 results
17:31 Bureau Veritas publishes vital resource for decommissioning industry
17:24 Italy’s first, fully-automated gantry cranes reach Vado Ligure
17:17 Best quarter performance ever at CTSP terminal: 168,500 TEUs, a 7.8% container traffic growth
17:09 Successful testing programme with enhanced Wärtsilä’s navigation systems promotes operational safety and efficiency
16:57 MSC optimises its Transpacific-USWC network
16:15 MABUX: Bunker prices continue upward trend
15:12 UCL Port’s 1Q volumes decline 3.9% Y/Y to 9.4 million tonnes
15:10 ABS evaluation demonstrates feasibility of LPG as fuel strategy for Dorian LPG
14:58 MAN to equip world’s first LNG-powered fishing trawler
14:55 VARD secures contract for one stern trawler for Nergård Havfiske
13:06 TCSP Group’s 1Q volumes fall 8.4% Y/Y to 3.88 million tonnes
12:08 Sea Port of St. Petersburg sees strong growth in 1Q volumes
09:26 Baltic Dry Index drops 37pts to 1162 points
09:08 akquinet and IDENTEC SOLUTIONS join forces to revolutionize refrigerated container management
08:39 Maersk Line starts new transatlantic service between Europe’s Mediterranean region and Canada
08:34 Compagnie Maritime Monégasque and Damen join forces to introduce Fast Marine Access in Brazil

2018 May 23

17:54 Container Terminal Saint-Petersburg invested RUB 256 million in modernization of its facilities in QI’2018
17:27 Greece suggests arranging cruise lines to Russia
17:00 Rosmorrechflot comes out for replacement of shipbuilding subsidies with cheap financing
16:16 Agreement on Enhancing International Arctic Scientific Cooperation enters into force
15:48 New Belgium container connection bolsters Port of Hull
15:25 DALO chooses SARIS to support SAR operations
15:03 FESCO transports three transformers from Novorossiysk for Moscow central heating and power plants
14:42 Ukraine’s water transport carried 0.3 million passengers in 4M’18, down 3%, Y-o-Y
14:21 Hapag-Lloyd update on restrictions for DG cargo handling at FIFA World Cup in Russia
13:59 Cargo transportation by Ukraine’s water transport fell by 18.5% to 1.0 million tonnes in 4M’18
13:36 SASCO BoD elected Aleksey Pavlov as Director General of the company
13:13 “K” Line announces delivery of special coal carrier “CORONA XANADU”
12:52 Tallink Grupp to list shares also on Helsinki Stock Exchange
12:31 Rosmorport appoints Sergey Lyamtsev as Acting Director of its Azov Basin Branch (photo)