• 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 February 16

10:26 Chevron inks new LNG agreement with GS Caltex

2019 February 15

18:05 Noble Corporation announces purchase of a second newbuild jackup rig from PaxOcean
16:57 Port of Goole powered by £1 million solar installation
16:26 ABP continues support of Felixstowe Volunteer Coast Patrol Rescue Service
15:30 Sea Cup 2019 preliminaries kick off in Kamchatka
15:04 CNIIMF authorized to confirm conformity of dangerous cargo containers
13:59 Nevsky Shipyard starts cutting metal for cargo-passenger ship of PV22 project
13:32 Murmansk Sea Fishing Port handled 5,500 tonnes fish in Jan’2019, down 48% Y-o-Y
13:08 Fincantieri and Princess Cruises celebrate three construction milestones of three “Royal” class ships at the Monfalcone shipyard
12:45 Dredging under Sea Port Sukhodol project to exceed 7 mln cbm – details to be covered at the Congress
12:08 Port of Oakland import volume increased 9 percent January 2019
11:46 8 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 14-15
11:27 Okskaya Sudoverf lays down seventh dry cargo carrier of Project RSD32M
11:08 DNV GL and Metalships & Docks ink class agreement for luxury sailing vessel
10:53 Throughput of Ukraine’s seaports in Jan’19 grew by 3.4% Y-o-Y to 11.19 million tonnes
10:29 Brent Crude futures price is up 0.63% to $64.98, Light Sweet Crude – up 0.57% to $54.72
10:08 EFIP welcomes the adoption of the European Parliament resolution on NAIADES II
09:41 Bunker prices are going up at the port of Saint-Petersburg, Russia (graph)
09:16 Baltic Dry Index up down to 628 points
09:07 ICTSI inaugurates the expansion of its Batumi International Container Terminal
08:07 MAN Energy Solutions wins contract to supply the engines for a new harbour tug in Spain
07:41 Inmarsat announces new initiatives to support maritime, ports and logistics start-ups with Rainmaking and Bluetech

2019 February 14

18:03 Austal's LCS 20 completes acceptance trials
17:44 Royal Navy to discuss the future of unmanned and autonomous naval warfare at SMi's 3rd annual Unmanned Maritime Systems Technology 2019
17:22 Freight turnover of Neva-Metal (Saint-Petersburg) in January 2019 fell by 26% Y-o-Y to about 190,000 tonnes
17:03 MOL Techno-Trade takes part in marine environmental protection program
16:25 VTB acquires 100% of Novorossiysk Grain Terminal from NSCP Group
16:03 Port of Virginia container volume up 8.9% to 134,638 TEU in January 2019
16:03 Expert expects uncertainty on global fuel market next week
15:49 “K” Line’s LNGC makes maiden call from Ichthys LNG Project to Naoetsu LNG Terminal in Japan
15:40 BSTDB to finance construction of Lavna coal terminal under agreement with STLC
15:21 2nd Conference “Dangerous cargoes: new transportation requirements” to be held under the auspices of RF Chamber of Commerce and Industry
15:03 ONE renewes own loading record exceeding 19000TEUs
14:33 Maersk and PBF Logistics LP announce agreement for production and storage of 0.5% sulphur fuel on the U.S. East Coast
14:02 Port of Long Beach volumes decrease 0.1 percent to 657,286 TEU in Jan 2019
13:50 Multipurpose Transshipment Complex to be built in Primorsk
13:32 Port of Los Angeles volumes up 5.4 percent to 852,449 TEUs in January 2019
13:02 Port of Rotterdam throughput volume up to 469.0 million tonnes in 2018
12:46 Supply vessel OCEAN COOPER 2 sinks in Singapore waters
12:25 Baltic Sea Region cruise ports commit to reducing negative ecological impacts
11:27 Bunker prices are flat at the Far East ports of Russia (graph)
11:09 Port of Marseille-Fos to deliver the first phase of the subsea cable landing infrastructure by Q3 2019
10:31 9 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 13-14
10:09 GTT receives an order from Samsung Heavy Industries for the tank design of a new LNG Carrier for Minerva Gas
09:44 Brent Crude futures price is up 0.66% to $64.03, Light Sweet Crude – up 0.58% to $54.21
09:25 Baltic Dry Index is up to 608 points
09:08 ABB to power Iceland’s first electric ferry ABB to power Iceland’s first electric ferry

2019 February 13

18:10 Shell and partners start deep-water production at Lula North in Brazil
17:46 OLT Offshore LNG Toscana Regasification Terminal works at almost full capacity
17:23 Excelerate’s Northeast Gateway Deepwater Terminal reached a peak send-out flow rate
16:58 Bunker sales at the port of Singapore in Jan’2019 fell by 8.9% Y-o-Y to 4.12 million tonnes
16:29 II HES and Dredging Forum to address deep-water routes to Sabetta and Novoportovsky terminal
15:57 Port of Singapore throughput in Jan’2019 fell by 2.4% Y-o-Y to 51.93 million tonnes
15:32 Throughput of Russian seaports in Jan'2019 grew by 5.6% Y-o-Y to 67.6 million tonnes of cargo (detalization)
15:05 Bank VTB acquired 50 percent minus one share in United Grain Company
15:04 NYK conducts crisis-response drill with ONE
14:56 DNV GL and Metalships & Docks ink class agreement for luxury sailing vessel
14:03 WMU and Japan cooperate on advancing BBNJ discussions
13:37 New Freeport of Riga Development Programme provides for expanded port operations
13:14 MOL Chemical Tankers and Den Hartogh Logistics form strategic alliance