• 2018 October 11 15:24

    MABUX warns bunker prices may be vulnerable amid the uncertainties on both the supply and demand side

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes rallied last week to their highest level since November 2014 supported by disruptions in the Gulf of Mexico related to Hurricane Michael. However there is downward correction on the market at the moment: API reported a major build of 9.75 million barrels of United States crude oil inventories for the week ending October 5. Anyway there is a number of uncertainties which may cause a state of high vulnerability for the fuel indexes in a short-term. On the supply side, there’s uncertainty about how much Iranian oil the United States will man-age to choke off. Then there’s uncertainty about how much spare capacity Iran’s fellow OPEC members and non-OPEC Russia could summon to replace Iranian losses. Finally, on the demand side, there’s uncertainty whether oil prices at four-year highs and consequently, fuel prices at multiple year highs, are already denting oil demand growth.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), finally demonstrated irregular changes in the period of Oct.04 - Oct.11:
        
    380 HSFO - down from 491.57 to 490.93 USD/MT (-0.64)
    180 HSFO - up from 533.00 to 535.21 USD/MT      (+2.21)
    MGO         - down from 762.36 to 752.71 USD/MT  (-9.65)


    Goldman Sachs said in a note that the oil market could swing into a surplus in early 2019 as spare capacity is deployed. As per Bank, production in Libya and Nigeria was higher than expected, by 300,000 bpd, and coupled with Saudi Arabia’s production ramp-up and the political stabilization of Iraq, which improved prospects for higher output from Kurdistan, it could provide a supply buffer for the final quarter of the year. The investment bank’s warning might not have an immediate effect on prices as traders are at the moment too preoccupied with the worry that OPEC’s spare capacity is at a historic low, but once it sinks in, prices could reverse their climb.

    The U.S. State Department in turn criticized Saudi Arabia for not using its spare capacity. A State Department official said that the U.S. was working with Saudi Arabia to use the spare capacity that they are not deploying, while also insisting that the U.S. was doing its part. The U.S. State Department also said OPEC and non-OPEC producers including Russia continue to withhold production.

    The International Monetary Fund (IMF) lowered its outlook for the global economy, expecting a growth rate of 3.7 percent this year and next, down from the 3.9 percent the Fund expected back in April. The IMF cited the uneven nature of the economic expansion, the increase in the likelihood of negative shocks, and the unsustainable policy support behind much of the growth. Robust economic growth underpins the assumed strong increase in oil demand, so any faltering in the global economy exposes downside risk to oil prices.

    The International Energy Agency (IEA) said that rising oil prices may hurt demand in some of the world’s fastest-growing nations unless producers take steps to boost supplies. India is among emerging market economies struggling with a combination of a weakening currency and rising oil prices. The country, which enjoyed a 12th straight month of demand growth in August, could see its trade deficit worsen because of the high crude. India moved to cut retail fuel prices on Oct.04.

    Meantime, India discussed last week the possibility of trading oil with Russia, Venezuela, and Iran either in Indian rupees or under a barter agreement. The idea to use rupees or a barter system comes as U.S. sanctions on Iran draws near and are just over four weeks away. It was also discussed the possibility of creating a rupee-yuan payment mechanism for trading with China.

    At the same time, Indian buyers reduced U.S. crude purchases and loaded up on Iranian oil ahead of the restart of U.S. sanctions next month. U.S. oil shipments to India fell to 84,000 barrels per day (bpd) last month, down 75 percent from a record high of 347,000 bpd in June. India accounted for 12 percent of U.S. crude exports in June. Meantime, Indian buyers lifted purchases of Iranian crude to 502,000 bpd in September, up 111,000 bpd over August. It was also reported that India has plans to purchase 9 million barrels of oil from Iran in November, contra-ry to earlier reports that led the market to believe India had no plans to do so.

    Iran’s crude oil exports plunged to 1.1 million bpd in the first seven days of October, sliding further down from 1.6 million bpd in September. According to tanker tracking, not a single tanker headed to Europe in the first seven days of October. Iran’s tankers were bound instead for China, India, and the Middle East. Besides, some one dozen Iranian oil tankers may have shut off their position devices last month. As a result, nearly 207,000 bpd of Iran’s oil exports that left Iranian oil terminals last month is reportedly unaccounted for.

    A tanker collision a month ago at a critical Venezuelan port may take longer to repair than initially expected. One of the docks will take probably another month before it can come back online, which will likely lead to steeper oil export losses. Venezuela’s exports fell to just 1.1 million bpd in September.

    A trade war between the United States and China is still a potential catalyst: as it escalates global oil demand is sure to suffer. While China hasn’t officially placed a tariff on U.S. oil, refiners and traders appear to be increasingly wary of purchasing oil from the U.S. – suggesting they believe the tariffs may be on the agenda.

    It was reported a dip of 2 in the oil and gas rig count in the United States last week, bringing the total number of active oil and gas rigs to 1,052 (the number of active oil rigs decreasing by 2 to reach 861). The oil and gas rig count is now 116 up from this time last year.

    The Yemeni Houthi rebels have detained 10 vessels, including fuel tankers, at the port of Hodeidah, and are preventing them from offloading their cargo. The vessels waiting to unload at Hodeidah, and some of them had been held up at the port for as long as six months. The port city is currently a battlefield between the Iran-backed Houthis and the coalition of Saudi and Emirati forces. Yemen’s oil reserves have been estimated at 3 billion barrels. Even before the start of the civil war, the country wasn’t a major oil producer, especially compared to the other countries in the Middle East.

    Persisting uncertainties on both the supply and demand side are making the market and participants nervous. Fuel indexes could be more vulnerable than usual to hints, news, and comments until the U.S. sanctions on Iran return in four weeks. We assume bunker prices may change irregular 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 June 16

17:13 DC area agencies to conduct mass rescue exercise off National Harbor
16:05 Boskalis appointed as salvor for both damaged tankers in the Gulf of Oman
15:53 Fincantieri and Naval Group sign a joint venture agreement
13:47 Diana Shipping Inc. announces the sale of a Panamax dry bulk vessel, the MV Thetis
12:47 WSC unveils its hybrid patrol vessel at Seawork 2019
11:41 GasLog Partners LP announces new multi-year charter agreement with Gunvor

2019 June 15

15:44 Wight Shipyard rolls out its new windfarm support vessel concept at Seawork Int'l 2019
13:17 Malta Freeport hosts its first LNG-powered container ship
12:53 Petrobras closes the sale of TAG
11:41 USCG, local partners respond to sailing vessel aground off Magic Island
08:43 Vessel training simulation underway at Tema Port’s new Terminal 3

2019 June 14

18:05 Ole Martin Grimsrud appointed CFO of Aker Solutions
17:44 USCG Cordova FOL crew saves man stranded for three days on Montague Island
17:05 Knud E. Hansen wins two separate contracts for innovative large RoRo vessels
16:41 Hapag-Lloyd to increase rates from North East Asia to Australia
16:26 Murmansk Sea Fishing Port handled 90,300 tonnes of cargo in Jan-May’2019, down 38.7% Y-o-Y
16:05 CMA CGM announces GRR from Asia to South Africa
15:14 “K” Line receives recognition for vessel speed reduction programs in the West Coast of North America
15:00 UK maritime industry leaders debate decarbonization, digital technologies and the future of safety at the annual ABS UK National Committee meeting
14:00 China Railway Container Transport signs strategic cooperation agreement with SITC International Holdings
13:38 Container throughput of Vladivostok Sea Fishing Port in 5M’2019 up 39% YoY to 89,649 TEUs
13:09 Algoma increases its interest in in the CSL International Pool
12:41 Port of Klaipeda (Lithuania) handled 19.77 million tonnes of cargo in 5M’2019, up 8.5% Y-o-Y
12:09 Global Ship Lease announces new charter agreements
11:32 Bunker prices continue going down at the port of Saint-Petersburg, Russia (graph)
11:09 ECSA issues statement on suspected attack on two oil tankers in the Gulf of Oman
10:51 France signs up to fishing vessel training treaty
10:30 Zhatai Shipyard to let build up to 10 river ships and scrap at least two ships per year
10:07 Jan De Nul plans to reduce CO₂ emissions by 15% a year
09:49 Brent Crude futures price is up 0.64% to $61.69, Light Sweet Crude – up 0.36% to $52.47
09:30 MacGregor automated mooring solution specified for the world's first autonomous and zero-emission container ship, Yara Birkeland
09:16 Baltic Dry Index is up to 1,062 points
09:07 GTT receives an order from HHI to design the tanks of two new LNG carriers
08:53 MABUX: Bunker market this morning, June 14
08:00 Long Beach cargo volumes down 16.6% to 573,623 TEUs in May 2019
07:01 Port of Los Angeles volumes up 7.8 percent to 828,662 TEUs in May 2019
06:58 MPA publishes second edition of guides on IMO 2020

2019 June 13

18:26 Maritime Technology Framework strengthens ties between DSME and DNV GL
18:05 J-ENG presents the latest technologies about MGO mono-fuel engine (UEC-LSJ), together with UEC42LSH and LP-EGR at 29th CIMAC World Congress
17:49 Port of Gdansk delegation takes part in IAPH conference, Guangzhou
17:28 Throughput of port Kaliningrad in Jan-May’2019 fell by 18% Y-o-Y to 4.98 million tonnes
17:04 Throughput of port Vyborg in Jan-May’2019 fell by 39% Y-o-Y to 373,000 tonnes
16:45 MarineTraffic partners with exactEarth to deliver most comprehensive vessel tracking yet
16:23 Throughput of port Primorsk in Jan-May’2019 grew by 8% Y-o-Y to 24.43 million tonnes
16:04 MarineTraffic partners with satellite AIS data provider exactEarth
15:39 Freight turnover of Neva-Metal (Saint-Petersburg) in 5M’19 fell by 10% Y-o-Y to 1.18 million tonnes
14:42 Viking Line announces additional departures on Helsinki-Tallinn routes during summer season
14:21 Throughput of port Vysotsk in Jan-May'2019 climbed by 8% Y-o-Y to 8.06 million tonnes
14:03 Hunter Group chooses OSM for technical management of newbuild VLCC fleet
13:49 Palau is approved by IMO as STCW White List member state
13:48 Jotun signs agreement with Hyundai Heavy Industries for a new type of marine paint
13:32 Bunker prices continue going down at the Far East ports of Russia (graph)
13:14 J-ENG rolls out its latest engine technologies at 29th CIMAC World Congress
12:39 Port of Ust-Luga handled 45.24 million tonnes in 5M’19, up 9% Y-o-Y
12:04 Jumbo awarded transportation & installation contract for Yunlin WTG foundations offshore Taiwan
11:03 Damen Marine Components acquires WK Hydraulics
10:50 Throughput of Port St. Petersburg in Jan-May'2019 climbed by 1% Y-o-Y to 25.01 million tonnes
10:36 Oshima Shipbuilding and DNV GL sign strategic cooperation
10:26 Damen Anchor & Chain Factory inks agreement with Fendercare at Seawork
10:11 Throughput of port Helsinki (Finland) in Jan-May’19 fell by 6.5% to 6 million tonnes (table)