• 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 May 23

18:43 DOF Subsea secures contract in Brazil
18:21 ZIM Q1 2019 revenues rose 6.0% to $796.2M
18:06 MOL to Join Consortium on TCFD (Task Force on Climate-related Financial Disclosures)
17:44 CNIIMF forecasts NSR cargo traffic to reach 100 million tonnes by 2035
17:11 USCG closes case of downed aircraft in Prince William Sound
17:06 Port of Rotterdam sees significant progress in development HES Hartel Tank Terminal
16:55 GOGL announced net loss of $ 7.5M vs net income of $ 23.6M in 1Q 2019
16:30 New digital solution from Rolls-Royce and ZF improves availability and CO2 emissions of ships
16:05 CMA CGM orders 50,000 Traxens trackers
15:23 OCTOMAR Serviços Marítimos takes delivery of Damen Fast Crew Supplier 2206
14:47 RF Navy’s destroyer participated in combat training in the Sea of Japan
13:36 High Representative/Vice-President Federica Mogherini visits ITS Carlo Margottini
13:05 Singapore to host Port Maintenance and Facilities Management Summit on 24-27 September 2019
12:29 Optimarin gears up for retrofit wave with expansion and new hires
12:19 FESCO and Russian Railways launch transit service for delivery of goods from Japan to Europe through Russia
11:43 Bunker prices go up at the Far East ports of Russia (graph)
11:21 Severnaya Verf starts cutting metal for third processing trawler of Project 170701 ordered by NOREBO Group
11:08 Diana Shipping announces time charter contract for m/v Baltimore with Koch
10:26 Brent Crude futures price is down 0.69% to $70.5, Light Sweet Crude – down 0.6% to $61.05
10:08 Port of Antwerp aims for more efficient road transport with night-time opening hours on Right bank of Scheldt
09:57 Kuibyshev reservoir level allows for fleet operation - RF Transport Ministry
09:39 NOVATEK signed MoU with Ninh Thuan Province in Vietnam
09:20 Baltic Dry Index is up to 1,059 points
09:10 MABUX: Bunker market this morning, May 23
09:08 Royal IHC signs contract with Cameroon’s Port Authority of Douala
08:25 Sempra LNG and Aramco Services Company sign heads of agreement for Port Arthur LNG

2019 May 22

18:05 CMA CGM to resume the Bijagos Shuttle service
17:50 RF Government approves rules for collecting port investment dues from ship owners in Russian seaports
17:38 The University of Calabria and Finсantieri ink training agreement
17:05 CMA CGM PAD-Service delivers first Zespri kiwifruits to the port of Zeebrugge
16:44 CMA CGM announces GRR from Asia to South Africa
16:05 Jinling Shipyard in China orders 4 × MAN 51/60DF engines for Baltic RoPax newbuilding
15:31 Throughput of port Helsinki (Finland) in Jan-Apr’19 fell by 3.5% to 3.89 million tonnes (table)
15:09 Rob Grool appointed new CEO at ZEABORN Ship Management
14:45 CMA CGM to upgrade its EUROSAL XL service between North Europe, the Caribbean and South America West Coast
14:29 InterMoor wins 2 mooring installation contracts from COOEC
14:04 Comprehensive drill held at CPC Marine Terminal
13:28 Astrakhan branch of Ship Repair Center ‘Zvezdochka’ launches rescue towboat SB-427 for RF Defence Ministry
13:09 DOF, KONGSBERG, SINTEF Ocean and NORCE join forces to deliver ‘Intelligent Efficiency’ for offshore operations
12:52 Gazprom Neft develops partnerships with leading cruise operators
12:27 New standard Cyber Security Clause agreed by BIMCO’s Documentary Committee
12:09 PETRONAS floating LNG Satu achieves its first LNG drop post relocation
11:44 ESPS Navarra provides maritime security training in Seychelles
11:09 Hamburg Süd christens “Polar Ecuador” in Antwerp
10:51 Throughput of port Vyborg in Jan-Apr’2019 fell by 34% Y-o-Y to 275,500 tonnes
10:30 Throughput of port Kaliningrad in Jan-Apr’2019 fell by 16% Y-o-Y to 3.94 million tonnes
10:08 Austal partners with Fred. Olsen on next generation MARINELINK Smart technology rollout
09:53 Baltic Dry Index is up to 1,049 points
09:37 Bunker market at the port of Saint-Petersburg, Russia sees mixed price movements (graph)
09:37 WesCom Signal and Rescue showcases its commitment to safety training at Nor-Shipping 2019
09:20 Brent Crude futures price is down 0.62% to $71.73, Light Sweet Crude – down 0.82% to $62.61
09:08 West Africa Container Terminal makes further investment in equipment
08:53 MABUX: Bunker market this morning, May 22
08:08 Ocean Yield takes delivery of two modern Ultramax dry bulk vessels with 11-year charters

2019 May 21

18:33 Maersk to charter 13 new feeder ships powered by conventional fuel from 2021
18:25 Long-term Wärtsilä service agreements support optimal performance for LNG Carriers
18:04 GTT notified by Samsung Heavy Industries for the tank design of a new LNG carrier for Nisshin Shipping
17:48 Throughput of port Vysotsk in Jan-Apr'2019 climbed by 7% Y-o-Y to 6.65 million tonnes
17:25 Bunker prices still show no considerable changes at the Far East ports of Russia (graph)
17:19 ABB to enable world’s first hydrogen-powered river vessel