• 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 October 21

08:54 20,000 TEU COSCO SHIPPING Sagittarius named in Shanghai
08:50 CFO Paul Smits leaves the Port of Rotterdam Authority
07:52 COSCO SHIPPING starts shipment of Toyota exhibits

2018 October 20

08:47 Boskalis, Van Hattum en Blankevoort and Mobilis construct deep-sea quay for the new HES Hartel Tank Terminal at Maasvlakte
08:10 Navios Partners announce filing of F - 1 for direct listing of Navios Containers
08:06 Maersk Line increases FAK rates for Northern Europe to Middle East and ISC trade
08:04 U.S. Navy contracts Austal to order materials for EPF 13
07:44 EU Commission launches the European Network of U-space Demonstrators

2018 October 19

18:42 ABN AMRO, Samsung SDS and the Port of Rotterdam Authority launch container logistics blockchain pilot
18:07 Stena Line's battery hybrid vessel completes its first month of operation
17:56 ABN AMRO, Samsung SDS and Port of Rotterdam Authority launch container logistics blockchain pilot
17:35 Port of Gdansk participated in the CILF 2018 fair in China
17:11 Gdansk pays a visit to Singapore
16:57 Testbed established for Internet of Ships Open Platform
16:48 Finland’s Water Transport Act aims to improve safety and increases preparedness for the future
16:26 World’s largest LNG bunker supply vessel “Kairos” started its voyage to Europe
16:04 KN will motivate its employees with the company's shares
15:42 New Falck training centre on the Maasvlakte officially openes
15:20 Seimas members visiting Klaipėda discussed benefits provided by LNG terminal
14:59 Ukraine plans dredging of 16.33 million cbm of material in 2019
14:37 UN agencies delivering on maritime security
14:15 Hapag-Lloyd starts new Red Sea service
14:00 Atomflot: shipments from Arctic LNG and Yamal LNG to be assisted by diesel and gas powered icebreakers
13:31 MOL's newbuilt LNG carrier "MARVEL EAGLE" to transport LNG from Cameron project in U.S.
13:11 NIBULON Shipbuilding and Repair Yard launches POSS-115 Project tug
13:05 BigLift Barentsz sails Northern Sea route for Pioneering Spirit
12:48 Glavgosexpertiza approves reconstruction of KSK grain terminal to increase its capacity to 4 million tonnes
12:22 Q&A with ImageSat International released ahead of SMi’s 4th annual Maritime Reconnaissance and Surveillance Technology conference
12:05 FESCO wins tender for supplying Indian Research Stations in Antarctica in 2019
11:43 Competition for designing and construction of LNG-powered icebreaker to be announced in late 2018 - early 2019
11:20 North Sea Giant turns to The Switch EBL technology
10:54 NOVATEK to place four FLNG facilities on the Northern Sea Route
10:31 RF Navy’s major amphibious ship Ivan Gren enters North Sea
10:07 Port of Vancouver closes 2018 cruise season
09:56 Brent Crude futures price up 0.4% to $79.61, Light Sweet Crude – up 0.35% to $68.89
09:38 Tackling maritime emissions - IMO rolls out ship and port toolkits
09:29 Expert forecasts more favorable ice situation on Northern Sea Route for 30 years ahead
09:15 Baltic Dry Index is up to 1,565 points
09:07 Hapag-Lloyd, CMA-CGM and COSCO enhance GEM service - covering Mediterranean with the Middle East / ISC
08:37 Samskip launches Netherlands-Italy multimodal rail service
08:07 SEA\LNG submits open comment on the draft supplemental environmental impact statement for Puget Sound LNG facility
07:20 Van Oord awarded offshore contract for the West White Rose Project

2018 October 18

18:03 VSDV opens new crossdock location in the port of Amsterdam
17:33 The first vessel in Klaveness Combination Carriers next generation of combination carriers named at New Yangzi Shipyard in China
17:17 Cargo transportation via Northern Sea Route can reach 17 million tonnes in 2018
17:03 Savannah container trade up 12 percent in September 2018
16:55 PGRK: sales strategy of Pavlovskoye deposit project is focused on foreign markets
16:33 SITC Logistics Group signs strategic cooperation agreement with Chengdu Port Investment Group and Guangzhou Port Logistics Group
16:03 NYK and Horiba to develop a new sulfur-in-oil analyzer for ships
15:34 Thames freight volume rises by 40% as Thames Vision strategy starts to bear fruit
15:33 Port of Rotterdam Authority and research institute TNO present results of the study at IMO meeting
15:31 Dublin Port volumes grow by 4.7% in first nine months. By year end, 36% growth in just six years
15:03 Chinese Lingang group invests 85 million euros in Zeebrugge inner port
14:47 Practical aspects of LNG bunkering to be discussed at the dedicated conference in Moscow on October 24
14:33 Nouryon, Tata Steel, and Port of Amsterdam partner to develop the largest green hydrogen cluster in Europe
14:24 Bunker prices may change irregular next week amid rising volatility on global fuel market, expert says
14:11 Tallink and Rauma marine constructions sign letter of intent for the construction of new shuttle ferry
14:02 VesselMan and DNV GL team up to offer optimized solution for dry-docking management
13:30 Project Forward paves the way for meeting IMO’s reduction on CO2 emissions
13:14 Equinor’s share saving plan allocates shares