• 2018 November 8 15:30

    Global fuel market is looking for some direction while Iran sanctions are in place: MABUX

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have been falling during the week. Concerns about demand continue. The trade dispute between the United States and China threatens growth in the world’s two biggest economies and currency weakness is pressuring economies in Asia, including India and Indonesia. On the supply side, oil is ample despite the sanctions against Iran as output from the world’s top three producers - Russia, the United States and Saudi Arabia - is rising.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), demonstrated firm downward trend in the period of Nov.01 – Nov.08:
        
    380 HSFO - down from 472.57 to 463.71 USD/MT (-8.86)
    180 HSFO - down from 518.71 to 511.79 USD/MT (-6.92)
    MGO         - down from 719.79 to 709.29 USD/MT (-10.50)


    Most of the world’s top oil trading houses expect oil prices to decline next year as slowing global economic growth and rising oil supply is expected to compensate Iranian crude export on the market. According to Vitol, oil markets are not that tight right now and a fair price of oil going into 2019 is probably closer to the $70 or $65 per barrel mark than the $85-$90 area. Vitol has now revised down its oil demand growth forecast for next year to 1.3 million bpd from 1.5 million bpd expected earlier. Trafigura in turn was the most bullish saying it wouldn’t be surprised to see oil hitting $100 per barrel by the end of next year. Gunvor thinks that oil prices will stay at current levels of around $75 a barrel Brent next year because producers are aware of the fact that higher prices would dent demand growth, which could lead to another glut.

    Goldman Sachs argues that the loss of supply from Iran, combined with thin spare capacity and resilient oil demand will push prices back up. The investment bank reiterated its forecast for Brent to hit $80 per barrel by the end of the year. As per Bank, oil demand is still growing at a brisk rate globally, and Chinese oil demand continues to surprise to the upside despite the ongoing activity slowdown. Goldman Sachs also argues that Iranian oil exports will still decline from here, despite the likely issuance of waivers by the United States to some importers. That means that prices might be hitting a temporary low provoked by the  implementation of U.S. sanctions on November 5, opening up upside potential thereafter.

    Iran's oil exports have fallen sharply since U.S. President Donald Trump said at mid-year he would re-impose sanctions on Tehran, but taking waivers into consideration major buyers are already planning to scale up orders from Iran again. The original aim of the sanctions was to cut Iran's oil exports as much as possible, to quash its nuclear and ballistic missile programs, and curb its support for militant proxies, particularly in Syria, Yemen and Lebanon. The exemptions, however, granted to Iran's biggest oil clients - China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey - which allow them to import at least some oil for another 180 days, could mean the exports start to rise after November. This group of eight buyers takes as much as three-quarters of Iran's seaborne oil exports.

    Meantime, the waivers are temporary, with Washington expecting the countries on the list will gradually reduce their imports of Iranian crude. In addition, the U.S. has asked its partners to reduce trade in other goods, not covered by the sanctions, with Iran to maximize the pressure. China in turn has already claimed that it would continue its trade with Iran and oppose the U.S. sanctions on the Islamic Republic as unilateral and long-arm jurisdiction.

    Iran from its part said that besides threats to close off the Strait of Hormuz, there is simply not enough spare capacity in the world to make up for lost Iranian supply, which would mean price spikes that would not be to the liking of Washington or its.

    OPEC and the U.S. are together adding enormous volumes of new supply, which together have softened the oil market. In October, OPEC hiked oil production to the highest level since 2016.  The higher output, led by Saudi Arabia and the UAE, come just as Iranian oil is going offline. Also, Libya saw a sharp rebound in production, although the country is not part of the OPEC+ production cuts.

    The 15 countries in OPEC produced an average 33.31 million barrels per day in October, the highest since December 2016. Russia, which is not part of OPEC but part of the OPEC+ coalition, continues to produce at post-Soviet record highs. Iran lost 100,000 bpd in October, due to buyers cutting back because of U.S. sanctions, but the losses were more modest than many forecasts had expected. The U.S. is also adding supply at an impressive rate. The EIA estimates that the U.S. produced 11.346 million bpd in August, an increase of 416,000 bpd from a month earlier. That level makes the U.S. the largest oil producer in the world.

    It was reported a 1-rig decrease for oil and gas in the United States last week, bringing the total number of active oil and gas drilling rigs to 1,067, with the number of active oil rigs decreasing by 1 to reach 874. The oil and gas rig count is now 169 up from this time last year. EIA’s estimates for US production for the week ending November 02 were for an average of 11.6 million bpd, a new record.

    Rather than accept proposals designed to ease the shift from 3.5% to 0.5% sulphur in marine fuel from January 1, 2020, the IMO instead tightened compliance on Oct.26 by adopting a ban on the carriage of non-compliant fuels in ships without exhaust scrubbers. Various estimates suggest IMO 2020 will involve a transfer in value of over $1 trillion between 2020-25. On the winning side: refiners, low sulphur crude producers, oil-fired power generators and some industrials; on the losing side, freight carriers, high sulphur crude producers and consumers.

    The change in specifications is global. Bunker fuel usage is around 5-6 million bpd, roughly 6-7% of the world oil market. Not only that but 0.5% sulphur fuel oil is a new product. Refiners have to reconfigure their kit to produce it, while ship owners will be running it through engines unused to the new specifications.

    All in all, global fuel market is looking for some direction now that Iran sanctions are in place. We expect bunker prices may turn into irregular fluctuations 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 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
17:06 Nexans awarded contract for the manufacturing, delivery and installation of 350 kV HVDC submarine cable in the Philippines
16:49 Throughput of port Riga (Latvia) in 11M’18 climbed by 6.5% Y-o-Y to 33.1 million tonnes
16:33 Konstantin Ponomarev appointed as head of RS Nuclear Ships Branch
16:10 Ship Recycling Transparency Initiative launches new online platform
15:58 MOL to participate in construction, ownership, operation of FSRU for Jawa 1 gas-fired IPP project in Indonesia
15:52 MOL LNG сarrier LNG Fukurokuju rescues castaway
15:26 Gasum consolidates its position as the leading Nordic LNG provider
14:58 NIBULON Shipbuilding and Repair Yard adds a new high-capacity German crane to its cranes
14:25 BIMCO publishes two 2020 sulphur clauses
14:00 Average wholesale prices for М-100 HFO down to RUB 16,794 in RF spot market
13:09 EU NAVFOR marks 10 years of operations
12:44 Pertti Korhonen to chair Traffic Management Finland BoD
12:07 Incheon Port container traffic increases by 10.4% in October 2018
11:51 Beginning of icebreaker assistance period announced at Big Port St. Petersburg
11:30 Cargo traffic in Volga Basin of Russia’s IWW in navigation season 2018 fell by 14.6% Y-o-Y to 36.662 million tonnes
11:07 Verifavia Shipping signs cooperations with 8 ROs to support IMO DCS verification
10:48 Port of Liepaja (Latvia) handled 6.89 million tonnes of cargo in 11M'18, up 13.8% Y-o-Y
10:24 Port of HaminaKotka throughput in 11M’2018 grew by 11.5% Y-o-Y to 14.89 million tonnes
10:07 Oman signs Jeddah Amendment on illicit maritime activity
09:45 Brent Crude futures price up 0.45% to $61.95, Light Sweet Crude – up 0.17% to $52.52
09:19 Baltic Dry Index is up to 1,372 points
09:07 CMA CGM announces FAK rates from Asia to the Middle East Gulf
08:07 Torqeedo displays 2019’s new electric boating products at Salon Nautique International de Paris
07:34 chainPORT concludes its 4th Annual Meeting at the Port of Barcelona

2018 December 9

17:01 Jan De Nul starts beach protection project in Benin
16:06 MOL to participate in construction, ownership, operation of FSRU for Jawa 1 Gas-Fired IPP Project in Indonesia
14:40 Coast Guard continues search for survivors of capsized migrant vessel off Dominican Republic
13:38 CMA CGM announces FAK rates for Asia-Middle East Gulf trade
11:39 MHI Vestas clinches largest MW turbine order for Scotland's Moray Firth

2018 December 8

17:15 Huntington Ingalls Industries names Herman Shelanski as new VP, Business Development at it's shipbuilding division
16:07 Gladding-Hearn built pilot boat delivered to Southwest Alaska Pilots Association
13:12 EGCSA blasts MPA's ban on open-loop scrubbers in Singapore
10:28 Torqeedo displays 2019’s new electric boating products at Salon Nautique International de Paris.

2018 December 7

18:01 Naming ceremony for Arctic condensate tanker Boris Sokolov held at Guangzhou Shipyard International
17:38 Tellurian and Vitol sign MOU for 15-year LNG sale on JKM
17:14 Port of Tallinn rewards emission-reducing ships with a discount of up to 8% on tonnage fees
16:50 Vladimir Putin presents Captain Zybko with Distinguished Maritime Service Order
16:26 BSAP updates move forward at HELCOM key meeting
16:02 Orange Business Services keeps Arctic Shipping Company fleet connected along the Northern Sea Route
15:37 EU NAVFOR promotes maritime security dialogue in Somalia
14:59 Protection structures to be built at the port of Sochi
14:25 Northern Fleet's frigate Admiral Gorshkov takes part in training in the Barents Sea
14:08 ABS signs MOU with KOMERI to create a new facility dedicated to improving the safety of LNG as fuel
13:08 Crowley adds 400 new refrigerated containers to its fleet
12:26 Freight turnover of Neva-Metal (Saint-Petersburg) in 11M’18 climbed by 3% Y-o-Y to about 2.9 million tonnes
11:57 Montreal, Canada to host 14th Arctic Shipping Summit on 13-14 March 2019
11:24 Vladivostok Sea Fishing Port handled 284,000 tonnes of fish in 11M’18, up 25.8% Y-o-Y
11:08 SEA Europe and ECSA pleased with EU’s actions on trade-distortive South Korean measures in shipping and shipbuilding
10:45 Extraordinary General Shareholders Meeting of LUKOIL approves interim dividends
10:21 Brent Crude futures price down 0.62% to $59.69, Light Sweet Crude – down 0.41% to $51.28
10:06 Barcelona City Council supports reducing pollution in the Mediterranean with a low emissions zone
09:42 Bunker prices are slightly down at the Port of Saint-Petersburg, Russia (graph)
09:19 Baltic Dry Index is up to 1,339 points
09:03 Fincantieri launches new ship “Carnival Panorama” for Carnival Cruise Line
08:07 NYK concludes long-term charter agreement for two LNG carriers with Total
07:24 ‘Breakbulk carrousel’ gives breakbulk and heavy cargo companies space for further growth in Rotterdam’s Waalhaven

2018 December 6

18:05 ONE Thailand receives 2018 Best Container Liner Award from Thai National Shippers’ Council