• 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 February 22

16:35 Aker Solutions to develop digital twin for Wintershall’s Nova field
16:12 Chiquita's new container ship pays its first visit to Kloosterboer in North Sea Port
15:31 DOF awarded contracts for three ROV Support Vessels in Brazil
15:12 Biggest wellboat in the world’s hull arrives at Havyard yard in Leirvik
14:55 Zaliv shipyard (Kerch) launched search-and-rescue ship of Project А163
14:12 Tideway completes installation of longest AC offshore wind export cable at Hornsea One in the UK
13:48 32 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 21-22
13:30 GTT creates a Digital Hub of Excellence in Singapore
13:04 The Spectrum of the Seas leaves the MEYER WERFT's dock
12:49 Sea Port of Saint-Petersburg upgrades its cane equipment
12:30 Port of Rotterdam bunker figures down to 9.5 million m3 in 2018
12:03 Algoma announces purchase of additional product tanker
11:30 Van Oord is one of the founding partners and main sponsor of PortXL
11:02 Fincantieri and Abu Dhabi Shipbuilding reach an agreement to cooperate in the UAE shipbuilding segment
10:30 Mitsubishi Shipbuilding holds christening ceremony for next-generation LNG carrier "MARVEL CRANE"
10:20 Port of Yeisk handled 159,000 tonnes of cargo year-to-date
10:00 CMA CGM implements Port Congestion Surcharge from Med and North Europe to Canada East Coast
09:58 The Netherlands ratifies ship recycling convention
09:35 Brent Crude futures price is down 0.24% to $66.91, Light Sweet Crude – down 0.16% to $56.87
09:17 Baltic Dry Index is up to 630 points

2019 February 21

18:33 AML’s MVP200 selected for new Swedish “RV Svea”
18:16 ​Shearwater GeoServices and TGS partner for major Brazil survey
18:03 NYK selected as a White 500 company for third consecutive year
17:55 Rosmorport to dredge 12.1 million cbm of material in 2019
17:34 Boskalis expands market position in marine survey through acquisition Horizon
17:29 GE to supply LM2500 gas turbine auxiliary equipment for Indian Navy’s P17A frigates
17:11 Hydrographic Company to get 15 new vessels by 2024
17:05 Rotterdam port innovation programme PortXL participants announced
17:03 H.H. Sheikh Theyab updated on ADNOC L&S strategy to become a global shipping champion
16:14 SCHOTTEL presents new shallow-water thruster SPJ 30 up to 150 kW
15:35 Forth Ports Group receives planning consent for new terminal at the Port of Tilbury
15:16 Algoma announces the Algoma Conveyor is headed for Canada
14:32 A.P. Moller - Maersk accelerates transformation and grows revenue in 2018
14:11 Teekay Tankers reports fourth quarter and annual 2018 results
13:46 Santos posts it 2018 net profit of $630 million
13:15 Gazprom Neft demonstrates solid growth across all key financial indicators in 2018
13:13 A.P. Moller - Maersk initiates demerger and separate listing of Maersk Drilling
12:49 ESPS Relampago’s crew carried out maritime training exercises with the Seychelles Coastguard
11:57 First meeting of Eastern Partnership LNG Network takes place in Warsaw
11:28 42 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 20-21
11:03 The UK publishes draft UK MRV legislation following Brexit
10:39 Taganrog Sea Commercial Port spent USD 60,500 under its social programme in 2018
10:16 IMO treaties ratified by Guyana
09:54 Allocations of Taganrog Sea Commercial Port for its environmental programme in 2018 totaled USD 96,400
09:31 Brent Crude futures price is up 0.18% to $67.2, Light Sweet Crude – up 0.51% to $57.45
09:15 Baltic Dry Index is down to 622 points

2019 February 20

18:13 Klaipėdos nafta carried out the 10th operation of reloading LNG from a gas carrier to ground storage tanks
17:52 VNIIR-Progress St. Petersburg supplies electrical equipment for Atomflot icebreaker
17:28 Documents on concession model for Taman dry cargo area project to be submitted to RF Govt in March 2019
17:04 Cammell Laird stages ‘float-off’ for new £10m ferry for Red Funnel
16:46 VTMS, AIS and Pilotage Service on the Northern Sea Route to remain under Rosmorport’s control
16:25 NOVATEK eyes arranging LNG bunkering in Sabetta
16:04 Maersk enhances Asia-Europe network to further improve schedule reliability
15:43 Decision made on transfer of FSUE Hydrographic Company to Rosatom Corporation
15:21 Euronav sells LR1 Genmar Сompatriot
14:54 SIA Extron Baltic receives award for rapid growth in the Port of Riga
14:30 NOVATEK announces consolidated IFRS results for year ended 31 December 2018
14:02 COSCO SHIPPING Lines and Bolloré Transport & Logistics sign a MoU to develop new synergies
13:39 ABP partners with Grimsby-based Maritime Academy
13:15 Toll unveils new Australian ship