• 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)





2019 January 24

14:37 Polskie LNG terminal is ready for expansion
14:14 German Shipowners’ Association calls upon the EU to find solution for boat refugees in the Mediterranean Sea
13:54 DCT Gdansk terminal expands its fleet of STS and RTG cranes
13:12 “K”LINE awarded CDP’s “A List 2018” on climate change ―Earning highest rating “A” for three consecutive years
12:35 Cargo traffic via Murmansk Sea Fishing Port in 2018 remained flat Y-o-Y at 331,200 tonnes
12:11 COSCO SHIPPING Ports takes 60% stake in Chancay Terminal, Peru
11:36 SEA\LNG releases study revealing compelling investment case for LNG as a marine fuel
11:30 Icebreaker assistance period begins at the port of Primorsk (Leningrad Region) from January 25
11:12 GTT receives an order from DSME for the tank design of two new LNG carriers
11:06 Bunker prices are flat at the Far East ports of Russia (graph)
10:47 Monjasa's bunker tanker Accra supplies marine fuel in the Panama Canal
10:29 15 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on January 23-24
10:04 Port of Gothenburg container volumes up by 17 per cent in 2018
10:00 Brent Crude futures price down 0.36% to $60.92, Light Sweet Crude – down 0.38% to $52.43
09:41 Wilhelmsen Ship Management selected as the manager for Pardus Energy’s FSRU
09:37 Matthieu de Tugny takes helm at BV's Marine & Offshore division
09:18 Baltic Dry Index is down to 982 points

2019 January 23

18:27 Planning for 2020 IMO's sulphur cap has already started
18:13 Eagle Bulk receives commitment for a new credit facility totaling $208 million
18:02 Port of Gdansk (Poland) throughput in 2018 totaled 49.03 million tonnes, up 20.7% Y-o-Y
17:40 Andrei Malyarov elected as Chairman of Severnaya Verf shipyard's BoD
17:19 RWE files acquisition of renewables businesses of E.ON and innogy with European Commission
17:03 The Board of Directors of Fincantieri appoints a second General Manager
16:51 Ice restrictions at the port of Arkhangelsk come into effect on February 15
16:37 USCG interdicts smuggling boat with convicted criminals aboard off Florida
16:24 Regulatory issues related to operation of seaport infrastructure facilities to be discussed at the 2nd HES and Dredging Congress
16:08 First discharge of LPG from Ichthys LNG Project in Japan carried by “K” LINE’s VLGC “GRACE RIVER”
16:03 CMA CGM to launch its Med Pendulum Service (MPS)
15:46 Ice restrictions at the port of Vyborg (Leningrad Region) come into effect on February 6
15:33 Nakilat – Keppel welcomes first FSRU at the Erhama Bin Jaber Al Jalahma Shipyard
15:28 MHI Vestas achieves final turbine installation at Horns Reef 3
15:18 Rolls-Royce completes €57 million upgrade of Rauma thruster facility
15:03 NYK announces delivery of new coal carrier for Hokkaido Electric Power
14:33 Port of Oakland reports more ships than ever plugging into grid
14:20 Throughput of Port Vysotsky up 10.7% to 7.89 million tonnes in 2018
14:03 Kiel welcomes the TUI Cruises newbuilding
13:45 Admiralteiskie Verfi shipyard lays down large freezing trawler of Project СТ-192
13:27 Coast Guard’s only heavy icebreaker arrives at Antarctica
13:02 Rotterdam as a circular hub for the raw materials transition
12:58 The Russian Federation accedes to passenger compensation treaty
12:51 New initiatives to strengthen Singapore as a global maritime hub announced
12:37 SCHOTTEL presents new mechanical hybrid propulsion solution
12:04 Port of Riga cooperates with Balarusian forest industry to further increase its timber cargo volumes
11:42 15 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on January 22-23
11:16 OSG exercises option for second 204,000 barrel barge at Gunderson Marine
10:55 Maritime Security & Offshore Patrol Week 2019 to be held for the first time ever in Dubai, UAE by IQPC Middle East
10:37 N-KOM welcomes first FSRU at the Erhama Bin Jaber Al Jalahma Shipyard
10:20 Responsibilities for implementation of state programmes of the Russian Federation divided between Deputy Prime Ministers
10:06 Brent Crude futures price up 0.03% to $61.52, Light Sweet Crude – up 0.02% to $53.03
09:48 Aderco: Planning for 2020 has already started
09:43 Vympel Shipyard lays down yet another hydrographic vessel / buoy tender of Project 19910 for RF Navy
09:19 Baltic Dry Index is down to 1,036 points

2019 January 22

18:25 Elengy prepares the sale of access capacities to the Fos Tonkin LNG terminal for the period 2021-2030
18:05 Monjasa steps up as the 2nd largest local bunker supplier in the Panama Canal in 2018
17:54 Relampago practices skills with UAE Navy ship
17:35 CalMac takes over the tiller at Argyll Ferries
17:05 NYK gets the highest-rated ‘A’ for Climate Change by CDP Survey
16:42 RF Government proposed candidates to Novorossiysk Commercial Sea Port's BoD
16:23 Pilbara Ports Authority achieves a new record tonnage on a single tide at the Port of Port Hedland
15:56 Port of Rotterdam Authority and Rotterdam Port Promotion Council renew collaboration