• 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)




2019 June 20

15:04 Busan Port Authority and Port of Rotterdam Authority sign contract for the issue of a five hectare site on Maasvlakte Distribution Park West
14:42 Composit participated in Dredging Summit & Expo 2019
14:25 UAE Shipping Association looks to branch out
14:03 MOL and GAIL sign charter contract for one LNG carrier
13:47 DNV GL: Building a marine supply infrastructure as part of a future hydrogen society
13:46 New generation trailing suction hopper dredger ‘Bonny River’ joins the DEME’s fleet
13:28 Helle Hammer awarded WISTA Norway’s LeaderShip Award 2019
12:50 Gazprom Management Committee reviews progress of Nord Stream 2 and TurkStream projects
12:24 Bunker prices are flat at the Far East ports of Russia (graph)
12:01 CMA CGM announces GRR from Asia to West Africa
11:36 ReCAAP ISC and Indian Coast Guard co-hosting 12th Capacity Building Workshop for Maritime Law Enforcement and Regulatory Authorities
11:11 NCSP Group’s consolidated cargo turnover for Jan-Apr 2019 increased by 0.3% to 47.6 million tonnes
10:42 Amendments to be introduced to the Water Traffic Act
10:10 Tallink Grupp connects first two vessels to shore power at Port of Stockholm in a bid to reduce environmental impact
10:09 CMA CGM announces FAK rates from Asia to the Middle East Gulf
09:46 Brent Crude futures price is up 1.81% to $62.95, Light Sweet Crude – up 1.69% to $54.9
09:27 MABUX: Bunker market this morning, June 20
09:17 Baltic Dry Index is up to 1,179 points

2019 June 19

18:14 Port of Southampton signs sister port agreement with PortMiami
18:05 Unique Wärtsilä fresh water production system offers one ton per day fuel savings
17:51 Continued rail investment at the Port of Southampton accelerates air quality improvements
17:28 PGNiG confirms production potential of Poland’s largest gas field
17:03 IMRF announces new Board of Trustees
16:40 Small-size missile ship Orekhovo-Zuyevo, Black Sea Fleet, completes tasks in the Mediterranean Sea
16:02 Hapag-Lloyd announces GRI from Asia to East Coast South America
15:39 Vympel Shipyard launched first Grachonok-class special purpose boat for Federal National Guard Troops Service
15:02 Black Sea Mediterranean Express (BMX Service) Additional Gemlik Call
14:43 Baltic Workboats announces delivery of 100m fully electric ferry
14:21 RS participates in Global Fishery Forum
14:02 MOL and Japanese shipyards design Next Generation Coal carrier 'EeneX'
13:45 Igor Sharkov appointed Director of FESCO Branch Office in Vladivostok
13:26 FESCO opens seasonal transportation to ports of Chukotka
13:02 Van Oord awarded large contract for Mozambique LNG project
12:34 NIBULON Shipbuilding and Repair Yard starts constructing vessels of new project
12:12 ICS meets in Faroe Islands
11:58 Frigate Admiral Gorhskov of RF Navy's Northern Fleet sails through Panama Canal
11:37 Ship inspection platform Idwal urges investors to carry out due diligence on asset condition as standards decline
11:19 WMU signed MOU with Higher Institute of Maritime Studies, Morocco
11:12 Damen signs Phase II contract with International Organization for Migration for nine additional SAR 1906 search and rescue boats
10:55 ABB wins system package with Keppel for dredging contractor Van Oord
10:33 Lavna coal terminal to reach design capacity of 18 million tonnes in 2022
10:00 Bunker market sees mixed price movements at the port of Saint-Petersburg, Russia (graph)
09:38 MABUX: Bunker Market this morning, June 19
09:32 Brent Crude futures price is up 0.03% to $62.16, Light Sweet Crude – up 0.22% to $54.23
09:15 Baltic Dry Index is up to 1,135 points

2019 June 18

18:36 Spotlighting IMO's actions on climate change
18:31 Transborders Energy signs joint study agreement with Kyushu Electric Power for FLNG Solution
18:06 Kim Heng Offshore & Marine Holdings signs MoU with HHC and Thaitan
18:03 Container service boost at Bristol Port
17:53 IMO and UN Environment – working together to keep the Mediterranean clean
17:36 ZIM introduces myZIM Personal Notifications
17:21 Incat launches a new 111-metre ferry for Spain
17:06 Hapag-Lloyd announces General Rate increase from Japan to Middle East
16:42 Nor-Shipping 2019 sets new records
16:20 Fincantieri and CNR present the results of six multidisciplinary research projects
16:04 Atlantic Towing buys Havyard 833 WE – build no 126
15:25 Live stream of IWW passenger transportation meeting, part of SmartTRANSPORT, starts on IAA PortNews website at 10:00, June 21
15:04 Port of Oakland approves Seaport Air Quality 2020 and Beyond Plan
14:33 Carnival Mardi Gras cruise ship hull assembly begins at Meyer Turku shipyard
14:02 Hapag-Lloyd announces FAK from East Asia to Europe and Mediterranean