• 2018 December 6 16:01

    MABUX: Big chance for bunker prices to turn into firm upward evolution again

    The Bunker Review is contributed by Marine Bunker Exchange
     
    November was the worst month for oil indexes in a decade due to fears of oversupply and slowing demand growth. However in the beginning of the week oil and fuel prices have turned into firm upward evolution as growing expectations that major producers, led by Saudi Arabia and Russia, will agree some form of production cut at a key meeting of OPEC ministers on Dec. 06-07 boosted sentiment.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), finally have followed general trend on global oil market and also have risen in the period of Nov.30 – Dec.06:
        
    380 HSFO - up from 383.93 to 394.36 USD/MT (+10.43)
    180 HSFO - up from 432.71 to 444.21 USD/MT (+11.50)
    MGO         - up from 605.64 to 612.50 USD/MT  (+6.86)


    The Organization of the Petroleum Exporting Countries meets on Dec.06 in Vienna to agree output policy and will discuss its strategy with producers outside OPEC, including Russia. OPEC and its allies are working towards a deal to reduce output by at least 1.3 million barrels per day (bpd) and they were still talking to Russia about the extent of its production cuts. How-ever Saudi Oil Minister Khalid Al-Falih said it was too soon to be certain that OPEC and other oil exporters would cut production because the terms of a deal remain unresolved.

    Helping OPEC in its efforts to rein in emerging oversupply was an order on Dec.02 by the Canadian province of Alberta for producers to scale back output by 325,000 bpd until excess crude in storage is reduced.

    Saudi Arabia is aiming to cut oil production in order to boost prices, but the recent vote by the U.S. Senate to end the war in Yemen, even if it doesn’t become law, heightens the pressure on Riyadh. That gives President Trump more leverage as he demands lower oil prices from Saudi officials. Saudi Arabia faces a choice between accepting painfully low oil prices or defying Washington by cutting production.

    Russia has started to concede that it needs to join a fresh Saudi-led oil production cut, but is still discussing with its key partners in OPEC over how much, how fast, and for how long it would potentially reduce its oil output. Meantime, Russia’s energy ministry is discussing potential oil production cuts with local producers. Most experts agreed that Russia can’t immediately reduce production and if it joins the cuts, it will cut output gradually, like it did the previous time.

    At the same time, the November data showed Russia’s oil production had fallen to 11.369 mil-lion barrels per day, an almost half a percentage decline from the record highs Russia kicked out in October of 11.41 million bpd. Production had previously been steadily increasing for months as Saudi Arabia and Russia attempted to lift production to make up for Iranian losses that most expected from the U.S. sanctions. The slip in production for November is not seen as a deliberate attempt to curb production to balance the market, but more as the natural consequence of issues with specific oilfields, and possibly from seasonality.

    A proposed U.S. legislation that could establish the way for suing OPEC for market manipulation is a big concern among the cartel. Such legislation would make OPEC subject to antitrust laws by removing a state immunity shield created by judicial precedent. Given U.S. President Donald Trump’s continued criticism of OPEC and the way the cartel manipulates the oil market and prices, OPEC members are concerned that the legislation may pass this time around. OPEC is also said to have urged all its members not to mention specific oil prices, and to instead stick to the market stability narrative in public comments about oil policies to avoid the risk of potential U.S. antitrust lawsuits for manipulating the market.

    Qatar is withdrawing from the OPEC as of January 2019. The decision came after Qatar, one of OPEC's smallest producers but the world's largest liquefied natural gas exporter, reviewed ways to enhance its role internationally and plan long-term strategy, including focusing on its gas industry. Doha is an influential player in the global LNG market with annual production of 77 million tonnes per year, based on its huge reserves of the fuel in the Gulf. It was also reported that the decision was not linked to a political and economic boycott of Qatar imposed since June 2017 by OPEC's de facto leader Saudi Arabia and three other Arab states.

    Iran said that the United States will not be able to stop Iran exporting its oil and any move to prevent Iranian crude shipments passing through the Gulf would lead to all oil exports through the waterway being blocked. Iran also warned the European Union that it could exit the 2015 nuclear deal if it does not begin to see some of the benefits from European efforts to rescue the accord. The United States has imposed sanctions on Iran and U.S. officials say they aim to reduce Iran's oil exports to zero in a bid to curb the Islamic Republic's missile program and regional influence.

    The Trump-Xi negotiations in Argentina G20 meeting had a favourable effect on prices. The U.S. will still keep in place $200 billion of tariffs on Chinese imports but will not increase those tariffs from 10 percent to 25 percent after the start of the year as originally planned. The deal will also keep, at least for now, Trump from placing another $267 billion worth of Chinese goods under tariffs. Washington and Beijing said they will try to achieve a permanent deal with-in the next 90 days. China, for its part, also agreed to offset its massive trade imbalance with the U.S. by buying more, but not yet specified amounts, of energy products, agricultural, industrial and other products. However the U.S. still has significant leverage: if a formal deal can’t be reached then it will hike tariffs to 25 percent, which could roil global stock markets, stagnate global economic growth, dampen oil demand growth and possibly lead to a recession across the globe, particularly in emerging economies.

    US production for the week ending November 30 continues to weigh on prices, averaging 11.7 million bpd for the third week in a row and the highest production rate for the United States. It was also reported a 3-rig decrease for oil and gas in the United States last week. The total number of active oil and gas drilling rigs now stands at 1,076, with the number of active oil rigs in-creasing by 2 to reach 887. The oil and gas rig count is now 147 up from this time last year, 138 of which is in oil rigs.

    A major catalyst for fuel prices to rebound from current levels could be the OPEC/non-OPEC meeting on December 6-7, at which the cartel and allies may announce a fresh production cut to stop the price decline, and to stabilize markets. We expect new production cut will be finally fixed so that bunker prices will have a chance to continue upward evolution.

     

     

     

     

     

     

     

    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 14

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
15:12 Mitsubishi Shipbuilding hosts christening ceremony for LPG carrier "LAUREL PRIME" for Astomos Energy
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
16:47 Port of Vysotsk cargo volume in Jan-Nov rises 6% to 16.86 million tonnes
16:36 Maersk Broker Bulk Chartering and NAODAN Chartering
16:26 YILPORT Holding wins Port Operator Award at Lloyd’s List Global Awards
16:03 Rosmorport releases RFPs for design of an DF 12/14MW icebreaker
15:49 Jotun and Kansai Paint build relationship to meet marine and protective demand
15:46 Baltic Sea Ports Authority icebreakers assist merchant vessels in the Gulf of Finland
15:21 Containerships receives its first LNG-powered container vessel
14:44 Uncertainty lingers in fuel markets despite OPEC cuts
14:17 Maersk Line receives Containership Operator of the Year award
14:13 Iran-Indonesia to develop port cooperation
13:22 NOIA: U.S. territories need the Offshore Wind for Territories Act
13:12 QPS inks first "Green Loan" with BNP Paribas
12:48 Panama Canal signs agreement with Brazil's Port of Itaqui
12:32 Port of Ust-Luga throughput in Jan-Nov drops 4% to 90.27 million tonnes (updates)
11:34 Port of St. Petersburg eleven-month volume rises 11% to 54.15 million tonnes (updated)
11:06 Nonius Engineering to join the 6th International Forum of Dredging Companies as its sponsor and speaker
10:16 Crude oil futures gain to $ 60,44 (Brent) and $ 51,32 (WTI)
09:07 Baltic Dry Index down 0.81% to 1353 points
08:34 CMA CGM receives the Environment Award at the Lloyd’s List Global Awards

2018 December 12

19:08 Hapag-Lloyd announces General Rate Increase from East Asia to USA and Canada
18:30 MEYER WERFT handed over AIDAnova to AIDA Cruises
18:21 IMO led panel discussion on wreck removal challenges at Salvage & Wreck Removal Conference in London
18:00 Newbuilding methanol carrier for Proman Shipping named CASTARA
18:00 Rosneft develops innovations for Russian Zvezda super-shipyard
17:46 Damen signs with Port Nelson for ASD Tug 2411
17:37 Almaz shipyard lays down icebreaker of Project 21180М, Yevpaty Kolovrat, for RF Navy
17:14 Comprehensive plan for NSR development to be ready by February 2019 – Yevgeny Ditrikh
16:49 Investments in the Arctic by 2024 estimated at RUB 5.5 trillion - Dmity Kobylkin