• 2018 June 7 15:39

    MABUX: State of high volatility will retain on global fuel market

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have continued firm downward trend during the week. The main factor was news that OPEC and its partners, including Russia, are considering a loosening of their production limits. Additional pressure was added by a report that the U.S. government had asked Saudi Arabia and other major exporters to increase oil output. The spread between the two benchmarks (Brent and WTI) is rare, and reflects uncertainty and confusion in the global fuel market, as well as regional differences in supply and demand.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) also demonstrated downward trend in the period of May.31 – June 07:

    380 HSFO - down from 435.14 to 431,29 USD/MT (-3.85)
    180 HSFO - down from 477.07 to 472,07 USD/MT (-5.00)
    MGO        - down from 692.57 to 674.29 USD/MT (-18.28)

    WTI dropped to a more than $10-per-barrel discount to Brent this week, the widest spread in three years. The pipeline bottlenecks in the Permian are starting to bite. U.S. ex-ports of crude are rising, while Brent-linked cargoes in the Atlantic Basin are struggling to find buyers.

    The U.S. government has asked Saudi Arabia and some other OPEC producers to increase oil production by about 1 million barrels per day (bpd). The request comes after U.S. retail gasoline prices surged to their highest in more than three years and President Donald Trump publicly complained about OPEC policy and rising oil prices. It also follows Washington’s decision to reimpose sanctions on Iran’s crude exports that had previously displaced about 1 million bpd from global markets. The request for extra oil are among the most forceful U.S. intervention in OPEC affairs since Bill Richardson (the energy secretary during the second administration of Bill Clinton, phoned the Saudi minister in the middle of an OPEC meeting in 2000 asking for a production increase). That time the intervention aggravated a dissent between Saudi Arabia and Iran.

    Meantime, Saudi Arabia and Russia committed to ramping up production to as much as 1 million barrels per day before the production cut deal ends at the end of this year, should it be-come a necessary step to meet demand with Venezuela’s falling production and Iran’s possible production or export shortfalls in the wake of US sanctions against it. Oil prices took another blow with Rosneft unexpectedly increasing production by 70,000 bpd. Iran and Kuwait are leading a faction within OPEC accusing Saudi Arabia of capitulating to U.S. and Russian pressure to drive the price of oil down. OPEC meets formally on June 22 to set oil policy. It is expected to agree to raise output.

    Venezuela’s production declined to 1.45 million bpd from 1.50 million bpd in May, compared to the implied target of 1.972 million bpd, which means that Venezuela’s involuntary cut in May was 617,000 bpd-more than the cut pledged. Besides, country is struggling to meet its supply obligations, with dozens of tankers waiting to take on its oil. The back-log is so severe that state-owned PDVSA has told some customers it may declare force majeure.

    Over the past few weeks, Iran has repeatedly sought EU support to offset renewed U.S. sanctions. Tehran wants the EU to help safeguard its oil export revenues, its most important source of income, by enlisting the help of European central banks. Consequently, the EU has been considering bypassing the U.S. financial system by handling oil purchases from Iran in euros in-stead of U.S. dollars.

    The consequences of the U.S. withdrawal from the Iran nuclear deal, the possible Irani-an response, and the actual physical barrels of oil that could be taken off the market are still very much an important factor for fuel prices. One of the most drastic reactions from Iran could be Tehran pulling out of the 1968 Treaty on the Non-Proliferation of Nuclear Weapons (NPT) (a treaty in which 93 countries, including Iran, have vowed never to obtain nuclear weapons).

    President Trump resumed trade war last week, slapping steel and aluminium tariffs on Canada, Mexico and the EU and industrial tariffs on China. The decision comes after offering exemptions to U.S. trading partners in recent months, and comments from the Treasury Secretary just two weeks ago that the trade war would be put on hold. The resumption of a trade war threatens to undermine demand, although the magnitude of the slowdown is hard to predict.

    US oil production is also pressing down on fuel prices, and for the week ending June 01, reach-ing 10.8 million bpd—the fifteenth build in as many weeks. US production continues to climb at a time when OPEC is obliged to a supply cut deal. When the deal was announced, the United States was producing 8.6 million bpd. Today, the US is producing more than 2.0 million bpd over that figure. US drillers also added 2 rigs to the number of oil rigs last week. The oil and gas rig count now stands at 1,060—up 144 from this time last year.

    The shipping industry is going to scrap the largest number of oil tankers this year in over a half-decade. The pace of scrapping comes after years of overcapacity and low rates, with the OPEC cuts also hurting demand for shipping. It is expected, that the poor market conditions will last until next year, but the removal of excess capacity will help.

    The market doesn’t know at the moment where the price of oil/fuel is going to be and probably doesn’t know where it should be, and so it’s open to some major price fluctuations. We expect a state of high volatility will retain on global fuel market. Bunker prices may continue slight downward trend 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 October 22

15:34 Nornickel’s Polar Transportation Division carried 2.4 million tonnes of cargo in navigation season 2018
15:10 ESPO congratulates Port of Valencia, Ports of Bremen, Port of Moerdijk and Port of Tangier for renewing Ecoports’ Environmental Standard
14:17 Sovcomflot named a finalist in four different categories of 2018 Lloyd’s List Global Awards
13:55 Onezhsky Shipyard delivered ice-class buoy tender named Fortuna
13:23 Pavilion Energy and BW ink deal for long-term charter of two Singapore-flagged LNG newbuilds
12:58 Average wholesale prices for М-100 HFO down to RUB 21,455 in RF spot market
12:36 LUKOIL BoD recommends interim dividend amount
12:13 Bunker sales at the port of Singapore in 9M’18 down 1.5% Y-o-Y to 37.46 million tonnes
11:51 Power of gender diversity on the agenda at Seatrade Maritime Middle East
11:32 Container throughput of port Hong Kong (China) down 5.6% to 14.69 million TEUs in Jan-Sep’18
11:09 Abu Dhabi Ports collaborates with MSC Mediterranean Shipping Company on international blockchain solution Silsal
10:50 Port of Singapore throughput in 9M’18 grew by 0.9% Y-o-Y to 470.49 million tonnes
10:28 Brent Crude futures price up 0.69% to $80.34, Light Sweet Crude – up 0.68% to $69.76
10:09 NYK PCTC receives special award from the Association for Rescue at Sea
09:47 STLC to obtain additional RUB 5.9 billion of federal subsidies in 2018
09:15 Baltic Dry Index is up to 1,765 points
09:06 ABS awards AIP to HHI’s standardized FPSO topside
08:08 DP World, UAE Region wins Terminal Operator of the Year at Maritime Standards Awards
06:22 ABS awards AIP to HHI’s deepwater FLNG hull

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