• 2018 August 9 14:16

    Expert says no firm trend in bunker price movements next week

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes edged up at the start of the week on the implementation of the first round of sanctions on Iran but then turned into downward evolution. At the same time, fuel market is trying to balance two competing trends. The first, is that rising OPEC production and a growing global trade war will cause a demand surplus. The second, that strong demand and an increasing amount of supply disruptions will lead to a shortage of oil in global markets.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), demonstrated irregular changes in the period of Aug.02 - Aug.09:
        
    380 HSFO - down from 440.00 to 437.36 USD/MT (-2.64)
    180 HSFO - down from 486.71 to 484.50 USD/MT (-2.21)
    MGO         - up from 666.14 to 672.43 USD/MT       (+6.29)


    As per Goldman Sachs, oil demand continues to be strong and the oil market is consuming very quickly OPEC’s spare capacity, so the oil market is going to be very tight. Bank said in mid-July that it continues to expect that Brent Crude prices could retest the $80 a barrel thresh-old this year, but probably only late in 2018, not this summer, as uncertainties mount over the timing and magnitude of global supply disruptions. As per Bank, the following factors make a substantial risk to supply: Venezuela’s oil production continues to decline, the heat on Iran could remove up to 1 million bpd off the market depending on how some countries like China react, Libya remains in a constant state of unpredictability, and U.S. supply growth is con-strained by infrastructure.

     OPEC boosted production by 340,000 bpd in July, as several members of the group ramped up output. Saudi production jumped to 10.63 million barrels per day, close to a record high. Kuwait, the UAE, Iraq and Algeria all boosted output to their highest levels since December 2016, just ahead of the implementation of the original OPEC+ deal. Meanwhile, Iran’s production fell to 3.72 million bpd in July as buyers began to curtail imports. Venezuela’s production also fell to 1.24 million bpd. Libyan output fell to 670,000 bpd. Overall compliance with the agreed upon cuts slipped to 105 percent, down from 131 percent in June. Still, with Russia, the United States and Saudi Arabia now all producing 10 million to 11 million bpd of crude, just three countries now meet around a third of global oil demand.

    Russia pumped in July its highest level of oil since the OPEC+ agreement entered into force in January 2017. At 11.215 million bpd, Russia’s oil production last month was very close to the post-Soviet record-high of October 2016, the month used as a baseline for the production cuts. It is expected RF oil production to stay at these high levels in the next five months.

    The return of U.S. sanctions against Iran threatens to take more than 1 million bpd of Iranian oil off the market. Amid heightened U.S.-Iran rhetoric in recent months, this is rather difficult to estimate how much Iranian oil the U.S. sanctions would choke off the market and how this supply disruption would impact oil and fuel prices. The main factor that will keep Iranian oil on the market is how successful Tehran is in convincing Asian buyers to purchase more Iranian crude oil. It is also quite possible that fuel prices are set for a rise in the coming months as the effect of the sanctions begins to be felt.

    At the moment data shows, that Iran’s oil exports dropped by 7 percent to 2.32 million bpd in July-their lowest level in four months-as South Korea and Europe are slashing imports ahead of the return of the U.S. sanctions on Tehran. However, Iranian oil exports to its top two customers-China and India-continued to stay high last month. Exports to China rose to 799,452 bpd in July from 722,100 bpd in June, while Iranian oil sales to India increased by more than 40,000 bpd from June to 706,452 bpd in July. Europe-which as a whole has been Iran’s third-biggest single customer-saw imports drop to 465,450 bpd last month from 485,768 bpd in June, with demand from France, Spain, and Turkey down and purchases from Italy and Greece steadily up.

    China in turn has declined to cut off purchases of Iranian oil, but it has apparently agreed not to increase imports. The decision is a modest success for the U.S. government, which is seeking to isolate Iran. The fear for the Trump administration was that China would ramp up imports to offset Iran’s losses, a move that would undercut the effect of sanctions. China’s decision to stand back could result in significant production declines for Iran.

    Meantime, as a part of trade war against the U.S., China has included for the first time liquefied natural gas (LNG) in its list of goods up for a potential 25-percent import tariff, should the United States impose additional tariffs on Chinese imports. China’s imports of U.S. LNG jumped to more than 1.88 million mt in January to July 2018 alone, up from 1.61 million mt in all of 2017. For private Chinese companies, a possible 25-percent tariff on LNG imports from the U.S. would completely take away their margin, and would keep them from being able to afford the cost of importing spot U.S. LNG cargoes in the near term.

    The EIA reported that U.S. oil production fell to 10.472 million bpd in May, down 30,000 bpd compared to a month earlier. The decline was a surprise because the agency had previously estimated that production was surging. While offshore Gulf of Mexico accounted for a big loss, U.S. shale grew slower than expected. The latest monthly figures raise the possibility that U.S. oil production might also be lower today than most forecasts believe.

    The IMO regulations on sulphur concentration in shipping fuels are set to take effect in 2020, but refiners are already starting to prepare themselves. Stockpiles of fuel oil are declining as refiners have begun to unload them. After January 1, 2020, demand for high-sulfur fuel oil from ship-owners is set to decrease, due to the regulatory change. But the discount for fuel oil relative to Brent crude has narrowed sharply, a reflection of falling supplies of fuel oil.

    Ship owners are scrapping oil tankers at the fastest rate since the 1980s, in part a result of the OPEC production limitations since 2017 and low tanker rates. However, analysts expect the surge in scrapping to pave the way for a rebound in shipping, following the principle: the more you scrap, the more you bring the recovery forward and accelerate its speed. It seems that the market believes it will strengthen with high scrapping even with smallest growth in demand.

    Continued trade tensions between U.S. and China persist while U.S. sanctions on Iranian goods went into effect, intensifying concerns that sanctions on Iranian oil, expected in November, could cause supply shortages. We expect bunker prices may turn into moderate 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 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