• 2018 May 24 16:15

    MABUX: Bunker prices continue upward trend

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have demonstrated firm upward trend during the week (despite of slight de-cline on May 23 due to an unexpected build in U.S. crude and gasoline inventories) and were at their highest in three and a half years.  Geopolitics continued to be the main supportive factor: the market grows increasingly wary over possible supply outages due to US sanctions on Iran, Venezuela’s crisis, and OPEC’s adherence to its production cut deal.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) also demonstrated slight upward trend in the period of May.17 – May 24:
        
    380 HSFO - up from 442,21 00 to 448,64 USD/MT(+6.43)
    180 HSFO - up from 480,64 to 487,29 USD/MT     (+6.65)
    MGO        - up from 708.79 to 714,43 USD/MT     (+5.64)

    The International Energy Agency (IEA) is ready to act if necessary to ensure that markets re-main well supplied. The agency is talking to both oil producers and oil consumers as crude prices recently reached their highest level since November 2014 on the back of heightened geopolitical concerns. Two weeks ago the IEA said that the restoration of sanctions on Iran may have implications for the market balance, adding that it is closely following the situation. Saudi Arabia in turn suggested shortly after the U.S. announced its withdrawal from the Iran nuclear deal that OPEC would act to mitigate any supply shortfall should it occur.

    OECD crude inventories fell in March by 27 million barrels, putting total stocks at a three-year low and, crucially, 1 million barrels below the five-year average. OPEC has claimed for more than a year that it was trying to erase the inventory surplus, and at least according to IEA data, that mission has now been accomplished.

    Meantime, OPEC and Russia were discussing price volatility on the oil market. It is expected that OPEC would step in to mitigate supply losses, although for now, the preference is to leave the production limits unchanged. OPEC officials have said the price rally is being driven by fear and not based on the fundamentals.

    Also, one of the main market’s concerns is additional U.S. sanctions against Venezuela after President Nicolas Maduro was re-elected for a six-year term. The process has been criticized by the United States, the European Union and major Latin America countries. Possible sanctions could hurt Venezuelan oil supply further, already reeling from lack of maintenance and state-run PDVSA’s inability to pay its bills. Most recently, the company elected to close its refinery in Curacao after ConocoPhillips has seized oil as it seeks to collect on a $2 billion court award. Barclays said output from Venezuela could fall below 1 million barrels per day while the country produced around 1.4 million bpd in April.

    Ahead of U.S. sanctions on Iran, U.S. Secretary of State Mike Pompeo threatened even tougher sanctions against the Islamic Republic. Pompeo claimed the sanctions would be the strongest in history when complete. The White House also laid out new demands for Iran on May 21, which said any new nuclear deal with the U.S. would require Iran to stop enriching uranium and to pull its support for militant groups in the Middle East.

    Iran in turn prepares for some disruption in its oil industry after the reintroduction of U.S. sanctions and would probably rely mostly on its biggest buyers: China, India and the European Un-ion. All of them have clearly indicated they had no intention to stop buying Iranian crude, with the EU specifically signalling it would make an effort to uphold the Iran nuclear deal and shield companies doing business in the country from U.S. sanctions.

    Meantime, President Trump is also pressuring Germany to scrap the Nord Stream 2 natural gas pipeline from Russia if it wants to avoid a trade war with the United States. Trump reportedly told German Chancellor Angela Merkel that the U.S. would restart talks with the EU on a trade deal in exchange for Germany cancelling the Nord Stream 2 pipeline.

    U.S. commercial crude inventories surged by 5.8 million barrels in the week-ending May 18. Traders were looking for a drawdown of 2.5 million barrels. U.S. crude oil exports dropped by more than 800,000 barrels a day last week to about 1.75 million barrels a day. Additionally, crude imports were up to 558,000 barrels.

    US oil production rose again in the week ending May 11, reaching 10.725 million bpd—the thirteenth build in as many weeks—and less than 300,000 bpd shy of the 11.0 million bpd forecast that many are predicting for 2018. US production has steadily increased since OPEC engaged in a supply cut deal. At the time the deal was announced, the US was producing 8.6 million bpd. Today, the US is producing more than 2.0 million bpd over that figure, while OPEC/NOPEC continues to curb supply on its end. Meantime, the U.S. oil rig count held steady at 844 last week after rising for six weeks in a row.

    There is a sign of hope that ongoing trade tensions between Washington and Beijing could be remedied. China said that it agreed to significantly increase its purchases of American goods and services, including energy and agricultural commodities. The disclosure came after the conclusion of intensive trade talks in Washington on May 19. A joint statement said, there was a consensus on taking effective measures to substantially reduce the United States’ trade deficit in goods with China. However, the two sides did not indicate if they would either delay or drop trade tariffs threats.

    China’s crude oil inventories rose by 65.3 percent between March and April, or by 37.84 mil-lion barrels on the back of lower refinery throughput rates and higher imports. This month should see another increase in oil stocks as imports remain robust. These hit a record high last month, at 9.64 million barrels daily, up by 14.7 percent on the year and by 4.1 percent on the month. But while China has been importing more crude, the source pattern of this crude has been changing. Earlier this month, Sinopec said it will cut crude oil shipments from Saudi Arabia by 40 percent in June, after it did the same with May shipments, after Riyadh surprisingly raised the price of its light crude for Asian clients. At the same time, Beijing has assured Iran it will continue buying crude from it despite U.S. sanctions.

    We expect geopolitical tensions in the Middle East and the situation in Venezuela will continue to support prices at least until OPEC’s next meeting with Russia, due in a month, when an announcement of quota easing might pressure them further. So bunker prices will continue upward evolution next week.

     

     

     

     

     

     

    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 June 18

18:12 Azerbaijan Caspian Shipping Company takes part in TransCaspian/Translogistica 2018
17:57 Legislative amendment promotes automatisation tests in maritime transport with regard to manning and watchkeeping
17:35 First major forum on the new Silk Road organised by the Port of Marseille Fos
17:05 Aker Solutions teams up with SAP for next steps in digitalizing its business
16:45 HMM signs Letter of Intent for its mega containership orders
16:24 Victor Olersky handed in his resignation notice
16:18 European Council extends sanctions on Crimea and Sevastopol for another year
16:05 DryShips announces agreements to sell two older Panamaxes
15:40 Tuapse Commercial Seaport elected seven BoD members
15:33 Poland holds World Maritime Day Parallel Event
15:13 IMO member states must progress on key sulphur cap issues at critical meeting in July
14:59 Average wholesale prices for М-100 HFO down to RUB 17,923 in RF spot market
14:13 Navios Maritime Containers announces acquisition of five containerships and options to acquire four additional containerships
13:35 Maersk launches a new line to the Middle East from Fos
13:00 Aker Arctic demonstrates autonomous vessel in model tests
12:36 ABB to improve Edda Fides floating hotel safety with leading digital technology
11:47 Freeport of Riga Authority and Port of Rotterdam Authority sign cooperation agreement
11:24 Port of Tallinn signs MoU with the City of Tallinn for development of the Old City Harbour area
11:01 Dorian LPG Board declines BW LPG'S unsolicited proposal
10:25 Brent Crude futures price down 0.76% to $72.88, Light Sweet Crude – down 1.73% to $63.73
10:12 Capital Product Partners L.P. announces new period charters for four of its product tankers
10:03 Port of Silloth invests £250,000 in new solar farm on Marshall Dock
09:41 Fishers fatalities give impetus to fishing vessel safety work
09:18 Baltic Dry Index up to 1,445 points

2018 June 17

18:40 Port of Oakland's largest terminal operator OK new lease to 2027
18:38 GoodBulk Ltd. announces delivery of Capesize vessel
18:32 Navios Maritime Partners announces sale of containership and options to sell four additional containerships

2018 June 15

18:35 Hapag-Lloyd implements Peak Season Surcharge from Mediterranean to USA
18:05 Wallenius Wilhelmsen Ocean adds Adelaide on the Australia service
17:54 Throughput of port Kaliningrad in 5M’18 up 12% Y-o-Y to 6.05 million tonnes
17:35 GTT conducts two FEED studies on two types of Gravity Based System
17:20 Throughput of port Vyborg in 5M’18 up 22% Y-o-Y to 610,900 tonnes
17:05 Port of Koper officially part of the New Silk Road
16:40 Yantar Shipyard launches yet another trawler of Project SK-3101R
16:35 Port of Long Beach volume up to 687,427 TEU in May 2018
16:05 Royal IHC joins PortXL
15:45 Throughput of port Vysotsk in 5M’18 declined by 3% Y-o-Y to 7.49 million tonnes
15:22 Main phase of Nizhegorodsky hydrosystem project obtains state expert approval
15:21 VTG FastTrack makes ad hoc transportation from the Port of Hamburg possible
15:00 Vopak opens new rail infrastructure in the port of Antwerp
14:21 Royal IHC and IHC IQIP sign memorandum of agreement with SOIC
14:09 DNV GL issues first type approval for aluminium cables onboard ships
13:16 Throughput of port Primorsk in 5M’18 down 18% Y-o-Y to 22.63 million tonnes
12:48 Bunker prices are down at the Port of Saint-Petersburg, Russia (graph)
12:27 Innovative solution for lowering of ship emissions tested in the port of Rotterdam
12:23 LUKOIL commissions third well at Filanovsky field second stage
11:59 Throughput of port Ust-Luga in 5M’18 down 1% to 41.48 million tonnes
11:31 Throughput of Big Port St. Petersburg up 16% to 24.73 million tonnes in 5M’18
11:02 Lloyd’s Register and TWI launch Fullagar Technologies
10:30 Kotug Smit Towage performs naming ceremony for Damen tugs Rotterdam & Beagle
10:24 Brent Crude futures price down 0.14% to $75.83, Light Sweet Crude – down 0.09% to $66.83
10:02 Seaports of Ukraine handled 54.3 million tonnes of cargo in 5M’18, down 2.1% Y-o-Y
09:40 Throughput of Russian seaports in 5M’18 grew by 2.7% Y-o-Y to 328.4 million tonnes (detalization)
09:19 Baltic Dry Index up to 1,433 points

2018 June 14

18:03 CMA CGM announces FAK rates from East Mediterranean ports to Gulf and Red Sea
17:47 Throughput of port Kavkaz in 5M’18 up 37% Y-o-Y to 15.34 million tonnes
17:33 APL unveils new China Southeast Asia Service 8
17:30 Specifications of products to be rated as manufactured in Russia will be updated
17:03 Pasha Hawaii receives new refrigerated containers as part of container replenishment program
16:48 State Duma approves federal law on setting rouble prices for services offered in Russian seaports (document)