• 2018 November 15 16:52

    Expert says downward trend in bunker prices may continue next week

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have continued downward evolution this week. Conflicting signals demonstrate a new level of uncertainty in global fuel market. After many media reports claimed that Iranian oil exports had been falling sharply and steadily, data now suggests the fall has been less steep-a fact immediately weighing on oil and fuel prices. Saudi Arabia is trying hard to stop the price declines, but it is going to need to convince OPEC+ to do more at the upcoming meeting in three weeks’ time.

    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.08 – Nov.15:
        
    380 HSFO - down from 463.71 to 433.79 USD/MT (-29.93)
    180 HSFO - down from 511.79 to 485.50 USD/MT (-26.29)
    MGO         - down from 709.29 to 675.07 USD/MT  (-34.22)


    OPEC+ meeting on Nov.11 yielded no formal change in supply policy, but did acknowledge that new strategies might be needed. Meantime, Saudi Arabia said OPEC and its allies should reverse about half the increase in oil output they made earlier this year as fears of shortages are supplanted by concerns about oversupply and collapsing prices.  Producers need to cut about 1.4 million barrels a day from October production levels. The kingdom will reduce shipments by about half that amount next month. OPEC and Russia added almost 2 million barrels a day to the market between May and October. While they were willing to take that action to ease prices and shield themselves from attacks from the U.S., many countries also need the value of a barrel to stay high enough to balance their budgets.

    Meantime, total OPEC production jumped in October, as Saudi Arabia and the UAE more than offset the declines from Iran. Iran saw production fall by 156,000 bpd, and Venezuela suffered another 40,000-bpd monthly decline. But Saudi Arabia added 127,000 bpd and the UAE added 142,000 bpd. Combined the entire group’s production edged up by 127,000 bpd. As the market expected supplies to tighten due to Iran sanctions, the increase has helped push down crude oil prices.

    Russia’s oil production is at a post-Soviet record high, but a cut in output may actually work to the benefit of Russian producers as producing less at $80 per barrel is better than producing at current levels and at $70 per barrel. A certain output decline will also help the companies to reduce operating costs and further improve their financials, including free cash flow

    Russian oil exporters are pressuring Western commodity traders to pay for Russian crude in euros and not dollars as Washington prepares more sanctions. This approach could undermine the dominance of the U.S. dollar as the global oil trade currency. Early indications of this undermining became evident this spring, when Russia and Iran launched an oil-for-goods exchange program seeking to eliminate bilateral payments in U.S. dollars and plan to keep it going for five years. Besides, Venezuela is also going to present its cryptocurrency, the Petro, to OPEC as a unit of account for oil trading next year, and China is also openly promoting its currency for oil trade and all trade.

    France in its turn aims to lead the European Union (EU) efforts in defying U.S. sanctions on Iran, by supporting the creation of a payment mechanism to keep trade with Iran and making the euro more powerful. The EU has been trying to create a special purpose vehicle (SPV) that would allow to continue buying Iranian oil and keep trade in other products with Iran after the U.S. sanctions were implemented. However, the block is struggling with the set-up, because no EU member is willing to host it for fear of angering the United States. Besides, on Nov.05 the Belgium-based international financial messaging system SWIFT said that it would comply with the U.S. sanctions on Iran and would cut off sanctioned Iranian banks from its network, which made the EU’s attempts to defy the U.S. sanctions more complicated.

    Iran claimed its army is ready to protect its commercial fleet, including crude oil tankers, from any threats. It was kind of response to last week’s U.S. advisory to all countries and ports doing business with Iran that Iranian ships are a floating liability. As per statement, self-insured Iranian tankers engaging in unsafe behavior with many tons of crude oil onboard is courting environmental and financial disaster. Iran in turn is going to file a complaint at the International Maritime Organization (IMO) over the sanctions on maritime transportation from the United States. Meantime, oil tankers bearing the Iranian flag have embraced a stealthy approach to keeping the oil flowing: they mislead international trackers by turning off their transponders, rendering the ships impossible to track by anything aside from visual cues.

    Iraq and Kurdistan are nearing a deal that could reopen shuttered oil production from disputed Kirkuk oil fields. After Iraq reclaimed territory from the Kurds in and around Kirkuk a year ago, operations at the fields were interrupted. The U.S. government has been pressing the two sides to resolve their differences.

    Venezuela’s oil production has been in free fall for two years. The country is suffering the worst loss of oil production in history amid an unprecedented economic collapse, years of mis-management and underinvestment in the oil industry. It is forecasted Venezuela’s inflation may surge to one million percent by the end of this year. Venezuela’s oil production plunged by 42,000 bpd from August to average just 1.197 million bpd in September. This compares to an average 2.154 million bpd for 2016 and 1.911 million bpd for 2017.

    U.S. production is among the main reasons for the latest oil price slump. U.S. energy firms added oil rigs for a fourth time in the last five, keeping the rig count at its highest level since March 2015. Drillers added 12 oil rigs in the week to Nov. 9, bringing the total count to 886. The Energy Information Administration (EIA) reported that rising shale production is putting the United States on track to hit the 12 million bpd oil production mark sooner than previously forecast. Next year’s U.S. crude oil output is now expected to average 12.1 million bpd, up from a fore-cast of 11.8 million bpd just a month ago in the October.

    China imported a record volume of oil in October, dispelling fears that the Chinese economy is slowing down. China imported 9.61 million barrels per day in October, up 31.5 percent from a month earlier. However, some of the factors driving imports higher are temporary, such as the need to fill strategic storage, plus a one-off buying by small refiners who had quotas that were nearing expiration.

    Besides, China is changing its sources of crude. The country sharply reduced its intake of U.S. crude, as the trade war between Washington and Beijing escalated this summer. A few months ago, Chinese refiners stopped buying U.S. oil completely in anticipation of tariffs on it. However, in October, refiners resumed purchases of U.S. oil, although the volume of these imports remains unclear. China will still be allowed to import some Iranian crude under a waiver to U.S. sanctions that will enable it to purchase 360,000 bpd for 180 days.

    At the moment global fuel market is being pressured from two sides: a surge in supply from OPEC, Russia and other producers, and increasing concerns about a global economic slow-down. We assume bunker prices may continue downward 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 December 17

11:42 Milaha unveils large plans to upgrade its shipyard in Mesaieed
11:01 IBIA welcomes decision by IMO’s MSC to add new item to its agenda to address concerns about fuel safety
10:43 SENER to design passenger vessel for Tanzanian ferry operator
10:17 Brent Crude futures price down 0.02% to $60.27, Light Sweet Crude – up 0.21% to $51.58
09:58 Port of Singapore throughput in 11M’18 grew by 0.4% Y-o-Y to 575.44 million tonnes
09:40 Floating regasification plant “Marshal Vasilevsky” arrives in Kaliningrad
09:15 Baltic Dry Index is up to 1,401 points

2018 December 16

16:09 Navios Acquisition completes acquisition of Navios Midstream
15:23 Thun Tankers names environmentally adapted tanker Thun Evolve
13:21 Traxens trials IoT network in port environment for first time, at MSC Terminal Valencia
12:32 Executives must watch both sea and air amid trade war tensions, warns Xeneta
10:55 CMA CGM announces FAK rates from ISC to North Europe and the Mediterranean
10:11 PGNiG receives third spot delivery of US-sourced LNG at Świnoujście

2018 December 15

16:23 MOL Passenger Line receives award for outstanding performance in 'Cruise of the Year 2018'
14:53 CMA CGM to implement GRR for India East Coast-West Africa trade
13:51 CMA CGM announces LSS on services from / to China, Hong Kong and Taiwan
12:44 NYK Cruises receives Grand Prix Award for 2018 World Cruise
11:27 TT-Line places order for RoPax "green" ferry with China's Jiangsu Jinling Shipyard

2018 December 14

18:17 Hapag-Lloyd to increase rates from East Asia to Mexico, Central America, West Coast of South America, Caribbean & Panama
17:48 Petersburg Oil Terminal puts into operation its emergency response team
17:33 Vinalines to open container shipping centre next week
17:30 Fairway adjustment will simplify Elbe traffic control already next year
17:27 Final cruise ship for the year calls to the Port of Gothenburg
17:23 The MV Magda joins the Klaveness Bulkhandling pool
17:16 India’s containerised export up 10% in the third quarter of 2018
17:13 FSL Trust announces newbuilding agreement for the construction of two LR2 product tankers
17:13 Havyard project with Havila Kystruten on hydrogen-powered coastal route operations to receive over NOK 100 million in funding from Pilot-E
16:24 World Fuel Services expands bunker operations in US leading up to 2020
15:57 IMO held training workshops in Cameroon Single Window for Foreign Trade Transactions
14:49 Onezhsky Shipyard lays down self-propelled hopper barge of Project HB600
14:08 Irish Continental Group plc takes delivery of cruise ferry W.B.Yeats
13:55 WMU takes part in Ocean Literacy Conference
13:31 First in industry ADNOC co-loads LPG and propylene onto same vessel in Ruwais
13:10 WMU hosted round table discussion regarding key challenges facing IMO
12:53 Bunker market at the Port of Saint-Petersburg, Russia shows mixed price movements (graph)
12:32 Nordic American Offshore secures contract for its PSV NAO Viking
12:11 Rosrybolovstvo supports 2nd Dredging and Hydraulic Engineering Structures Congress
11:50 Association of Commercial Sea Ports celebrates its 30th anniversary
11:24 Gazprom and Itochu sign MoU under Baltic LNG project
11:06 Scorpio Bulkers announces time charter-out agreement
10:48 Domestic ferry safety exercise conducted in Indonesia
10:25 IMO holds training for managing insecurity in west Indian Ocean and Gulf of Aden
10:06 EC adds six new yards to its ‘European List of ship recycling facilities’
09:47 Brent Crude futures price down 0.61% to $61.05, Light Sweet Crude – down 0.4% to $52.37
09:25 GTT notified by HSHI for the tank design of two new LNG carriers for CMM
09:18 Baltic Dry Index is up to 1,365 points
08:06 Fincantieri publishes its Sustainability Plan 2018-2022
07:14 Port of Long Beach cargo volume up to 621,835 TEU in November 2018
06:09 Mitsubishi Shipbuilding holds christening ceremony for LPG carrier "LAUREL PRIME"

2018 December 13

18:43 Coal exports via Rosterminalugol hit 19-millionth tonne mark
18:28 Port of Kaliningrad throughput in Jan-Nov rose 4% to nearly 13 million tonnes
18:25 Tideway completes installation of longest AC offshore wind export cable at Hornsea One in the UK
17:49 Hapag-Lloyd to cancel calls at Port of Bremerhaven
17:25 Building of Johan Sverdrup Phase II begins
17:19 Port of Vyborg 11-month cargo volumes soar 24% to 1.72 million tonnes
17:13 Seabridge first in Belgium to receive the SCA certificate
17:08 Jan De Nul cleans up polluted beaches along the coast in southern France
17:07 Bunker fuel prices at Far Eastern ports close the week lower
17:00 Murmansk Region will improve water safety regulations – Marina Kovtun
16:47 Port of Vysotsk cargo volume in Jan-Nov rises 6% to 16.86 million tonnes