• 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 October 17

11:27 Norddeutsche Reederei H. Schuldt joins V.Group
10:50 Brent Crude futures price down 0.09% to $81.34, Light Sweet Crude – up 0.06% to $71.88
10:42 CMA CGM to introduce new BAF on Europe-Africa trade
10:37 Damen Shipyards Galati hands over 74-metre fishery research vessel to Angolan government
10:27 Maritime Arctic Competence Center opens in Saint-Petersburg
09:42 KN invests in environmental protection measures
09:20 Baltic Dry Index is down to 1,578 points

2018 October 16

18:33 Maersk Line announces new FAK rates from Mediterranean to West and Central Asia
18:03 ABS holds two seminars at the 58th Genoa International Boat Show
17:55 Throughput of port Kaliningrad in 9M’18 grew by 5% Y-o-Y to 10.65 million tonnes
17:36 Wärtsilä opens the first International Maritime Cyber Centre of Excellence in the world
17:03 CMA CGM announces Overweight Surcharge on Asia and India to Africa trades
16:56 Wärtsilä launches Acceleration Centre in Singapore and partners with MPA and PSA Marine to develop IntelliTug
16:40 Throughput of port Vyborg in 9M’18 up 22% Y-o-Y to 1.33 million tonnes
16:21 Throughput of port Primorsk in 9M’18 fell by 11% Y-o-Y to 39.80 million tonnes
16:03 Höegh LNG announces amendment of the Höegh Gallant time charter
15:44 LUKOIL starts construction of facilities at Rakushechnoye field
15:22 Throughput of port Vysotsk in 9M’18 climbed by 6% Y-o-Y to 13.69 million tonnes
15:03 Avatar Logistics initiates cooperation with Sand & Grus AB Jehander and buys the vessel MS Jehander
14:41 Throughput of port Ust-Luga in 9M’18 declined by 5% Y-o-Y to 72.38 million tonnes
14:20 CMA CGM announces GRR from Far East to West Africa
14:03 Lithuanian Railways, Metrans and the Port of Hamburg strengthen relations
13:52 Throughput of Port St. Petersburg up 12% to 44.22 million tonnes in 9M’18
13:06 Scorpio Bulkers announces update on scrubbers
12:39 Project 22800 small missile ship Burya to be floated out on 23 October
12:13 Rolls-Royce and Intel announce autonomous ship collaboration
11:55 The Port of Riga outlines a vision for future development of Spilve Meadows
11:31 Ørsted selects GeoSea for Borssele 1 & 2 foundation and turbine transport and installation
11:14 Jan De Nul will dredge access channel to Guayaquil Port
11:11 RF Navy’s Baltic Fleet detachment completed tasks in Mediterranean Sea
10:59 Damen Maaskant Shipyards Stellendam celebrates 70 years and bids farewell to director Frits van Dongen
10:50 Detachment of RF Navy's Pacific Fleet completes visit to Republic of Korea
10:28 WMU holds needs assessment workshop in Jordan
10:02 Brent Crude futures price up 0.31% to $81.03, Light Sweet Crude – up 0.11% to $71.86
09:43 IMO ​pushing forward with tackling greenhouse gas emissions
09:17 Baltic Dry Index is up to 1,584 points

2018 October 15

18:23 MOL joins hands with partners to launch FOCUS project
17:59 Moscow to host a conference on construction of LNG-powered and LNG bunker ships on October 24
17:46 Algoma announces cancellation of Croatian newbuilds contracts
17:05 Klaveness Combination Carriers AS registered on NOTC
16:56 Tall ships arrive at Port of Ipswich as part of 'Race of the Classics'
16:37 Coast Guard ends search after plane crash victims bodies are located
16:20 Krasnoye Sormovo shipyard delivers 8,140 DWT Pola Fiva, fifth dry cargo carrier of Project RSD59
16:04 DNV GL leads consortium to update Carbon Trust Floating LiDAR Roadmap
15:34 East Mediterranean projects take steps towards adoption of alternative fuels
15:04 NYK approves Japan Climate Action Summit declaration
14:51 Wärtsilä LNG solutions featured on environmentally advanced cruise ship
14:35 Coast Guard sets port condition X-ray in Georgia, South Carolina
14:17 Andrey Shunin appointed as General Director of Caspian Energy Management
13:28 Cooperation for sustainable shipping in the Mediterranean
12:41 ACL christens its newest G4 vessel, the Atlantic Sun
12:13 Kongsberg Digital and KPMG launch new complete cybersecurity partnership for the maritime industry
11:55 Nevsky Shipyard took part in Offshore Marintec Russia
11:19 ABS leads industry discussion on digitization, safety and compliance
11:12 New shipping route links Gdansk and Scandinavia
10:51 Port of Gdansk considered as transport hub for Slovakia
10:29 Brent Crude futures price up 1.21% to $81.4, Light Sweet Crude – up 1.04% to $72.08
10:10 Tuco Marine Group to build a multipurpose first responder boat for Hovedstadens Beredskab I/S
09:53 Baltic Dry Index is up to 1,579 points
09:34 Gazprom and Shell discuss next steps in Baltic LNG project