• 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)




2019 September 21

12:52 Kongsberg wins first full-scope expedition cruise vessel tender, with gensets and propulsion equipment
11:34 Rauma Shipyard bags Finnish Navy's four corvettes order

2019 September 20

18:41 Vostochny Port joins Coordinating Council on Trans-Siberian Transportation as its permanent member
18:22 IAA PortNews offers photo release from 'Development of Icebreaking and Support Fleet' conference held on NEVA 2019 zero-day
18:05 Global Ship Lease announces new five-year $268 mln credit facility for debt refinancing
17:24 Vostochny Port’s harbour services fleet presented at dedicated conference in Saint-Petersburg
17:05 F. A. Vinnen places entire fleet with Verifavia Shipping & Rina for IHM services
16:50 Helsinki Shipyard (Finland) to build two liners for polar cruises
16:35 COSCO SHIPPING Ports announces disposal of interest in various port assets and possible disposal of Taicang Terminal and Jiangsu Petrochemical Terminal
16:21 ABB presents electric power and propulsion solutions for icebreaking vessels at NEVA 2019
16:05 Port of Los Angeles protects overall clean air gains
15:19 Port of Riga rapidly increases volume of handled wood pellets
14:53 South Korean port to slash passenger vessel emissions with ABB shore power
14:15 Krasnoye Sormovo launches Pola Pelagia, dry cargo carrier of Project RSD59З, for Pola Rise
13:30 Damen Shipyards Group is ready to ensure construction of electric water buses for rivers and canals of Saint-Petersburg and Russia
13:12 MSC Cruises and Fincantieri unveil further details of MSC Seashore at coin ceremony
12:24 Victor Olersky sees promising future of electric river passenger ships in Saint-Petersburg and in Russia
12:09 Algoma Central Corporation announces agreement to acquire Croatian-built vessel
11:28 Specifications for 0.50% sulphur fuels and the PAS from ISO: IBIA explains
11:09 GTT obtains Approval in Principle from Bureau Veritas for the Mark III Flex technology on ice-breaking LNG carriers
10:52 IBIA and S&P Global Platts collaborate to help shipping industry comply with IMO 2020
10:31 Workshop for training on emergency response, preparation and planning held in Manila
10:09 Van Oord and Shell test the use of biofuel on trailing suction hopper dredger HAM 316
09:50 State Duma ratifies Convention on the Legal Status of the Caspian Sea
09:33 Brent Crude futures price is up 0.20% to $63.73, Light Sweet Crude – up 0.98% to $58.7
09:25 Lloyd’s Register, China Merchants, GTT, CNOOC, DSIC form jv to design LNG-fuelled VLCC
09:17 Baltic Dry Index is down to 2,192 points
08:58 MABUX: Bunker Market this morning, Sept 20

2019 September 19

18:04 Bibby Marine Services takes the next step to optimize walk-to-work operations
17:56 Marinet approves Poseidon maritime cyber security project
17:37 American Ethane reveals plans to order 17 VLECs
17:34 Wärtsilä’s Board of Directors decided on the distribution of the second dividend instalment
17:22 Marinet approves T2OT project for high accuracy positioning of seagoing vessels
17:04 VARD secures advanced stern trawler contract with Luntos
16:50 Average wholesale prices for М-100 HFO down to RUB 14,328 in RF spot market
16:34 Zeebrugge port authority invests in new 1,071 meter quay wall
16:04 RINA to classify Swedish Maritime Administration fleet
15:53 Marinet set to establish exports support center in Finland in 2020
15:34 MacGregor secures orders worth more than EUR 20 million for projects in Europe and Asia
15:05 Wärtsilä foresees a lower result for 2019
14:31 North Pole ice-resistant platform presented by Admiralteiskie Verfi at NEVA 2019
14:09 ABS announces LNG Cargo Ready notation for ethane carriers at Gastech 2019
13:46 Hyundai Heavy Industries receives AIP for new LPG carrier design
13:03 Bunker prices go up at the Far East ports of Russia (graph)
12:40 ABS and AEC сollaborate on newbuild VLEC fleet
12:17 Murmansk Sea Fishing Port handled 171,200 tonnes of cargo in 8M’2019, down 28.5% Y-o-Y
11:58 PortNews-TV offers video on naming ceremony for PortNews tanker
11:36 International symposium on Anthropogenic Underwater Noise held in Hamburg on 10 September
11:09 LR awards DSME AiP for 98,000 m3 VLEC design with High MnA steel tank
10:42 Ships of RF Navy’s Caspian flotilla take part in Tsentr 2019 maneuvers
10:09 Singapore and Panama ink MoU to strengthen maritime relations
09:51 Brent Crude futures price is up 0.20% to $63.73, Light Sweet Crude – up 0.33% to $58.23
09:49 MABUX: Bunker market this morning, Sept 19
09:33 Baltic Dry Index is down to 2,266 points
09:18 ABS grants AIP for two next generation gas carrier designs

2019 September 18

18:26 SGRE confirmed member of the Dow Jones Sustainability Indices in 2019
18:03 MOL repays existing loans through issuance of project bond for FPSO charter project
17:48 Russia’s Rosmorrechflot and Ministry of Industry and Trade develop preferential leasing programme
17:30 Vympel DB develops concept design for Arctic cruise ship
17:22 Metal Shark delivers new foil-assisted catamaran excursion vessel to Pure Florida