• 2018 September 20 21:17

    Expert says production declines and geopolitical unrest may push bunker prices up

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have not had any firm trend during the week: fuel markets are trying to make sense out of both supply and demand questions as well as geopolitical uncertainty. OPEC downgraded demand while the IEA said in a report that supply outages are tightening up the oil market.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), demonstrated insignificant and irregular changes in the period of Sep.13 - Sep.20:
        
    380 HSFO – up from 448.79 to 451.57 USD/MT     (+2.78)
    180 HSFO – up from 494.86 to 495.79 USD/MT     (+0.93)
    MGO        – down from 714.14 to 710.29 USD/MT (-3.85)

    The International Energy Agency (IEA) reported that the oil market is tightening up. Global supply surpassed 100 million barrels per day (bpd) in August, a new record high. Production even rose from OPEC, despite turmoil seen in several member countries. As per EIA, the main reason for the volatility is the ongoing supply losses from Venezuela, combined with the disruptions in Iran related to U.S. sanctions. Venezuela’s production fell by another 40,000 bpd or so, taking output down to just 1.24 million bpd. It may end the year at 1 million bpd or lower. Meanwhile, buyers are already cutting their purchases of Iranian oil ahead of the November 4 deadline.

    OPEC in turn cut its 2019 oil demand forecast because of economic headwinds. The 1.41 mil-lion bpd demand growth forecast is 20,000 bpd lower than last month’s figure.

    China is going to retaliate against new U.S. trade measures after Trump imposed 10 percent tariffs on about $200 billion worth of Chinese imports. The tariffs are likely to limit economic activity in both China and the United States, potentially hitting growth in demand for oil as less fuel is consumed to move goods for trade.

    U.S. sanctions on Iran are set to go into effect in November, but countries have already been slashing purchases. China however has said that it would not stop buying Iranian oil (although Beijing has agreed not to increase its oil purchases from Iran). Between January and August, Iran was sending on average 660,000 bpd of oil to its biggest oil customer. Total Iranian oil shipments for September slumped to 1.3 million bpd through September 13, compared to just above 2 million bpd in August, when Iranian exports started to fall noticeably. Although the shipment gap is unlikely to signal that China has been purposefully scaling back purchases to comply with U.S. pressure to have Iranian oil sales at zero, it could mean that Chinese refiners were looking for better terms for Iranian oil purchases.

    Iran in turn has started to store oil on tankers in the Persian Gulf. Shipments are set to average as little as 1.5 million barrels a day in September according to the preliminary loading program, compared to around 2.8 million barrels a day of oil exports in April and May. Between 2012 and 2016, Iran stored millions of barrels of oil on supertankers because it could not export enough. That practice is making a comeback.

    The protests and riots in Iraq’s oil-rich southern region are flaring up again, potentially posing a threat to lose upwards of 700,000 to 800,000 barrels of production in the country’s record oil export levels. The lack of spare capacity makes such an outage especially worrying.

    U.S. Secretary of Energy Rick Perry said during his meeting with Russia’s Energy Minister Alexander Novak in Moscow last week that the United States welcomes competition from Russia on the global energy markets, but Russia can no longer use energy as an economic weapon. He also confirmed that the U.S. could impose sanctions on Nord Stream 2 and more energy sanctions were being planned. Novak, for his part, said that Russia agrees that energy cannot be a tool to exercise pressure and that consumers should be able to choose the suppliers. Russian minister sees huge uncertainty on the market – how the countries, which buy almost 2 million barrels per day of Iranian oil will act. Russia could step in if the market needs more supply. The country has potential to raise production by 300,000 barrels per day mid-term.

    The U.S. Energy Information Administration (EIA) reported on Sep.11 that the U.S. bypassed Saudi Arabia in February to become the second largest global oil producer. It was the first time in more than 20 years that the U.S. out produced Saudi Arabia. Then in June and August, U.S. output bypassed Russia for the first time since February 1999. The EIA also expects that U.S. crude oil production, most of it light sweet crude, will continue to exceed Russian and Saudi Arabian crude oil production for the remaining months of 2018 and through 2019. U.S. production this year is expected to grow 1.31 million bpd to 10.66 million bpd, and 840,000 bpd to 11.5 million bpd next year.

    The South China Sea has been a source of territorial conflict for years, but the Philippines and China are nearing a deal on joint development of natural gas reserves in the region. If a deal is reached, it would be a major win for Beijing as it seeks to extend its claim on territory in the sea, while also clearing some problems towards gas development.

    The global oil/fuel markets remain fragile because of production declines and geopolitical unrest. We expect bunker prices may continue 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 December 12

19:08 Hapag-Lloyd announces General Rate Increase from East Asia to USA and Canada
18:30 MEYER WERFT handed over AIDAnova to AIDA Cruises
18:21 IMO led panel discussion on wreck removal challenges at Salvage & Wreck Removal Conference in London
18:00 Rosneft develops innovations for Russian Zvezda super-shipyard
18:00 Newbuilding methanol carrier for Proman Shipping named CASTARA
17:46 Damen signs with Port Nelson for ASD Tug 2411
17:37 Almaz shipyard lays down icebreaker of Project 21180М, Yevpaty Kolovrat, for RF Navy
17:14 Comprehensive plan for NSR development to be ready by February 2019 – Yevgeny Ditrikh
16:49 Investments in the Arctic by 2024 estimated at RUB 5.5 trillion - Dmity Kobylkin
16:23 Vladimir Putin orders to look into creation of port SEZ at Olya port in Arkhangelsk Region
15:50 Throughput of Russian seaports in 11M’18 grew by 4.2% Y-o-Y to 746.8 million tonnes (detalization)
15:26 Okskaya Sudoverf launches first dry cargo carrier of Project RSD32M
15:02 American Petroleum Institute (API) awards bolt fatigue testing program contract to DNV GL
14:25 Giant Octopus added to the CPC’s stock of ER equipment
14:01 London hosts global port environment experts
13:20 Pola Anatolia, dry cargo ship of RSD59 design, successfully passed sea trials
13:01 Newcastle Container Terminal to deliver savings for regional NSW
12:36 Sovcomflot BoD considered the Group’s financial plan for 2019 and a forecast for 2020-2021
12:01 Diana Shipping announces time charter contract for m/v Ismene with Koch
11:49 Yury Trutnev appointed as head of revised State Commission for Arctic Development
11:22 Three icebreaker escort operations performed in eastern part of Gulf of Finland during 24 hours on December 11-12
11:00 COSCO SHIPPING Ports partners with Abu Dhabi Ports to create regional trading hub and Middle East gateway for Belt and Road
10:47 Throughput of Rostov-on-Don port in 11M’18 up 15% Y-o-Y to 22.9 million tonnes
10:20 Brent Crude futures price up 1.16% to $60.9, Light Sweet Crude – up 0.67% to $52.3
10:11 Full bonded area is opened in Port Bronka
10:01 WMU welcomes ITF General Secretary and President
09:59 GTT receives an order for the tank design of two new LNG carriers
09:44 Bunker prices continue going down at the Port of Saint-Petersburg, Russia (graph)
09:16 Baltic Dry Index is down to 1,364 points
08:28 Boskalis Ndurance’ cable trencher successfully tested at Alexiahaven
08:05 Maritime Blockchain Labs announces new consortium to improve crew management

2018 December 11

17:59 ASW Severomorsk of RF Navy's Northern Fleet makes a call to the Republic of Djibouti
17:33 Diesel submarine of RF Navy’s Pacific Fleet conducted training exercise in the Sea of Japan
17:10 Port of Antwerp International to consult USPA on tariff setting, concession and environmental policy
16:46 Van Oord supports the 6th Forum of Dredging Companies as its Sponsor
16:21 Yamal LNG reached full capacity
16:02 Hapag-Lloyd announces rates from Indian Subcontinent & Pakistan to North Europe
15:32 Georgia Ports Authority on track for 4.3M TEUs in 2018
15:20 Four new sponsors confirmed to join line-up at 2019’s Maritime Reconnaissance and Surveillance Technology conference
15:02 Hapag-Lloyd announces rates from Middle East to North Europe
14:48 Draft law on Arctic administration approved in the third reading by Russia’s State Duma
14:32 ECSA welcomes the decision by the EU Commission to update the EU list of ship recycling facilities
14:02 Global Ship Lease announces new long-term charter agreements with CMA CGM
13:32 Maersk Broker Bulk Chartering and Wonsild Dry to merge as of January 2019
13:15 Throughput of port Kavkaz in 11M’18 grew by 13% Y-o-Y to 45.61 million tonnes
13:02 COSCO SHIPPING Ports and Abu Dhabi Ports inaugurate CSP Abu Dhabi Terminal
12:46 Throughput of Russian seaports in 11M’18 grew by 4.2% to 746.81 million tonnes
12:13 Alfa Laval sells more than 100 GCU units for LNG newbuilds
12:01 Overseas Shipholding Group and American Shipping Company jointly announce extension of tanker charters
11:44 One icebreaker escort operation performed in eastern part of Gulf of Finland during 24 hours on December 10-11
11:40 The second phase of IMO-implemented safe and sustainable ship recycling project in Bangladesh starts
11:17 Bunker prices are flat at the Far East ports of Russia (graph)
10:58 NYK сoncludes long-term charter agreement for three LNG carriers with MC
10:30 MAN Cryo and partners develop marine liquid-hydrogen fuel-gas system
10:05 Port of Gdansk reports new quarterly record
09:39 Brent Crude futures price up 0.37% to $60.19, Light Sweet Crude – up 0.31% to $51.16
09:16 Baltic Dry Index is up to 1,385 points

2018 December 10

18:08 US major retail container ports imports reach 2 million containers in October 2018
17:50 Taganrog Sea Commercial Port spent USD 67,300 for its environmental programme in 9M’2018, up 6% YoY
17:27 Icebreakers of FSUE Rosmorport assisted 322 ships in navigation season 2018-2019