• 2018 July 12 18:03

    High volatility in global bunker market, expert says

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes prices have demonstrated rather volatile fluctuations during the week: fears of the escalating U.S.-Chinese trade war and increased production by Saudi Arabia and Russia pulled against concerns over supply disruptions from Venezuela and Libya as well as the looming sanctions on Iran. However, despite a significant draw in U.S. inventories by nearly 13 million barrels, fuel indexes fell on Jul.11 as Libya restored production and the U.S. softened its stance regarding Iranian oil sanctions. At the moment there are some signs that the market is recouping some of heavy losses from the previous session.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) resulted in insignificant irregular changes in the pe-riod of Jul.05 - Jul.12:
        
    380 HSFO - down from 447.71 to 445,36 USD/MT (-2.35)
    180 HSFO - up from 483.86 to 485,50 USD/MT     (+1.64)
    MGO        - down from 680.79 to 678.29 USD/MT (-2.50)

    Barclays raised its oil price forecasts for Brent Crude and WTI Crude for 2018 and 2019, and sees Brent Crude averaging $73 per barrel, and the U.S. benchmark averaging $65 a barrel next year, as it expects lower supply from Iran and Libya to further tighten the oil market. According to the bank, OPEC and Russia’s decision to reverse some of the production cuts would deplete the global spare capacity and push prices up, but OPEC’s leader Saudi Arabia, as well as Russia, would be making efforts to cap a big upside in oil prices because much higher prices would destroy oil demand growth.

    U.S. tariffs on $34 billion worth of Chinese goods began on Jul.06, with retaliatory tariffs from China immediately implemented. China said the U.S. has now initiated the largest trade war in history. The escalation of the trade war is showing no signs of reaching a resolution and raising threats to global economic growth. Besides, a tariff of 25 percent on U.S. oil is under consideration in China. If that happens, Chinese demand would then shift to other suppliers driving oil/fuel prices further up (China is expected to import around 400,000 bpd from the U.S. in July).

    Meantime, Russia also imposed extra duties of 25-40 percent on some imports from the United States in response to Washington's tariff move. The extra duties will apply to imports of fiber optics, equipment for road construction, oil and gas industry, metal processing and mining. Be-fore it was declared that Russia will impose duties on goods which have Russian-made substitutes.

    Despite of started trade war Goldman Sachs maintained its bullish outlook on commodities, arguing in a research note that the trade war will not derail rising prices. The investment bank predicted a 10 percent return on commodities over the next 12 months.

    The Russian Finance Ministry has warned that the long-term equilibrium price level for crude oil is currently around US$50-60 a barrel, but actual prices are substantially higher than that and the current growth should be regarded as temporary. If oil prices continue to remain above long-term equilibrium levels, the price collapse will repeat again. The report, however, noted that the next price collapse could be avoided by boosting production in countries including the United States, Angola, Canada, and Brazil.

    Saudi Arabia ramped up production in June to 10.5 million barrels per day, or an increase of 500,000 bpd from a month earlier. Saudi Arabia’s all-time record high stands at about 10.7 mil-lion bpd and it looks like the country is planning to breach that level this month. It also seems that Saudis follow President Trump’s several demands published in twitter last week for more production.

    Libya saw its output fall to 700,000 bpd in June, down from 955,000 bpd in May. However, the standoff with General Khalid Haftar appeared to be on its way to some sort of resolution, with the militia handing the ports back over to the internationally-recognized NOC in Tripoli. As is always the case with Libya, the situation is fluid, and any return of production does not come with a guarantee that it will be sustained.

    The Trump administration is pushing countries to cut all imports of Iranian oil from November when the U.S. reimposes sanctions against Tehran. Last month, the State Department toughened its stance, insisting that imports of Iranian crude be reduced to zero, which naturally boosted international prices further. Meantime, last comments from U.S. Secretary of State Mike Pompeo seemed to soften America’s position and opened up the possibility that the U.S. won’t take a zero tolerance policy towards countries importing oil from Iran, or that there could be some sort of phased implementation.

    In such a situation world powers and Iran appeared to make no concrete breakthrough on Jul.06 in talks to provide Tehran with an economic package to compensate for U.S. sanctions. Ministers from Britain, China, France, Germany and Russia met their Iranian counterpart in Vienna for the first time since U.S. President Donald Trump left a nuclear accord in May. Iranian officials have said that key for them is to ensure measures that guarantee oil exports do not halt, and that Tehran still has access to the SWIFT international bank payments messaging system or an alternative.

    It was reported an increase in the number of active oil rigs in the United States last week. The overall rig count increased by 5 rigs, with all of that increase coming from oil rigs (bringing the total count to 863), the number of gas rigs stayed the same. The steady upward climb that U.S. oil production has been on throughout 2018 appears to have leveled off at 10.9 million bpd, where it has remained for five weeks now.

    Syncrude Canada’s 350,000-bpd outage at its oil sands facility was expected to last through July, but restoration could take longer than expected. The facility could be brought back online in phases, and full output might not be achieved until September or October.

    Still, we think that increased production may not be enough, and prices will be supported by the continuous drop of Venezuela’s and Iranian loss of exports. We expect bunker prices may continue slight 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)




2019 February 15

18:05 Noble Corporation announces purchase of a second newbuild jackup rig from PaxOcean
16:57 Port of Goole powered by £1 million solar installation
16:26 ABP continues support of Felixstowe Volunteer Coast Patrol Rescue Service
15:30 Sea Cup 2019 preliminaries kick off in Kamchatka
15:04 CNIIMF authorized to confirm conformity of dangerous cargo containers
13:59 Nevsky Shipyard starts cutting metal for cargo-passenger ship of PV22 project
13:32 Murmansk Sea Fishing Port handled 5,500 tonnes fish in Jan’2019, down 48% Y-o-Y
13:08 Fincantieri and Princess Cruises celebrate three construction milestones of three “Royal” class ships at the Monfalcone shipyard
12:45 Dredging under Sea Port Sukhodol project to exceed 7 mln cbm – details to be covered at the Congress
12:08 Port of Oakland import volume increased 9 percent January 2019
11:46 8 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 14-15
11:27 Okskaya Sudoverf lays down seventh dry cargo carrier of Project RSD32M
11:08 DNV GL and Metalships & Docks ink class agreement for luxury sailing vessel
10:53 Throughput of Ukraine’s seaports in Jan’19 grew by 3.4% Y-o-Y to 11.19 million tonnes
10:29 Brent Crude futures price is up 0.63% to $64.98, Light Sweet Crude – up 0.57% to $54.72
10:08 EFIP welcomes the adoption of the European Parliament resolution on NAIADES II
09:41 Bunker prices are going up at the port of Saint-Petersburg, Russia (graph)
09:16 Baltic Dry Index up down to 628 points
09:07 ICTSI inaugurates the expansion of its Batumi International Container Terminal
08:07 MAN Energy Solutions wins contract to supply the engines for a new harbour tug in Spain
07:41 Inmarsat announces new initiatives to support maritime, ports and logistics start-ups with Rainmaking and Bluetech

2019 February 14

18:03 Austal's LCS 20 completes acceptance trials
17:44 Royal Navy to discuss the future of unmanned and autonomous naval warfare at SMi's 3rd annual Unmanned Maritime Systems Technology 2019
17:22 Freight turnover of Neva-Metal (Saint-Petersburg) in January 2019 fell by 26% Y-o-Y to about 190,000 tonnes
17:03 MOL Techno-Trade takes part in marine environmental protection program
16:25 VTB acquires 100% of Novorossiysk Grain Terminal from NSCP Group
16:03 Port of Virginia container volume up 8.9% to 134,638 TEU in January 2019
16:03 Expert expects uncertainty on global fuel market next week
15:49 “K” Line’s LNGC makes maiden call from Ichthys LNG Project to Naoetsu LNG Terminal in Japan
15:40 BSTDB to finance construction of Lavna coal terminal under agreement with STLC
15:21 2nd Conference “Dangerous cargoes: new transportation requirements” to be held under the auspices of RF Chamber of Commerce and Industry
15:03 ONE renewes own loading record exceeding 19000TEUs
14:33 Maersk and PBF Logistics LP announce agreement for production and storage of 0.5% sulphur fuel on the U.S. East Coast
14:02 Port of Long Beach volumes decrease 0.1 percent to 657,286 TEU in Jan 2019
13:50 Multipurpose Transshipment Complex to be built in Primorsk
13:32 Port of Los Angeles volumes up 5.4 percent to 852,449 TEUs in January 2019
13:02 Port of Rotterdam throughput volume up to 469.0 million tonnes in 2018
12:46 Supply vessel OCEAN COOPER 2 sinks in Singapore waters
12:25 Baltic Sea Region cruise ports commit to reducing negative ecological impacts
11:27 Bunker prices are flat at the Far East ports of Russia (graph)
11:09 Port of Marseille-Fos to deliver the first phase of the subsea cable landing infrastructure by Q3 2019
10:31 9 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 13-14
10:09 GTT receives an order from Samsung Heavy Industries for the tank design of a new LNG Carrier for Minerva Gas
09:44 Brent Crude futures price is up 0.66% to $64.03, Light Sweet Crude – up 0.58% to $54.21
09:25 Baltic Dry Index is up to 608 points
09:08 ABB to power Iceland’s first electric ferry ABB to power Iceland’s first electric ferry

2019 February 13

18:10 Shell and partners start deep-water production at Lula North in Brazil
17:46 OLT Offshore LNG Toscana Regasification Terminal works at almost full capacity
17:23 Excelerate’s Northeast Gateway Deepwater Terminal reached a peak send-out flow rate
16:58 Bunker sales at the port of Singapore in Jan’2019 fell by 8.9% Y-o-Y to 4.12 million tonnes
16:29 II HES and Dredging Forum to address deep-water routes to Sabetta and Novoportovsky terminal
15:57 Port of Singapore throughput in Jan’2019 fell by 2.4% Y-o-Y to 51.93 million tonnes
15:32 Throughput of Russian seaports in Jan'2019 grew by 5.6% Y-o-Y to 67.6 million tonnes of cargo (detalization)
15:05 Bank VTB acquired 50 percent minus one share in United Grain Company
15:04 NYK conducts crisis-response drill with ONE
14:56 DNV GL and Metalships & Docks ink class agreement for luxury sailing vessel
14:03 WMU and Japan cooperate on advancing BBNJ discussions
13:37 New Freeport of Riga Development Programme provides for expanded port operations
13:14 MOL Chemical Tankers and Den Hartogh Logistics form strategic alliance
12:51 7 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 12-13