• 2019 February 14 16:03

    Expert expects uncertainty on global fuel market next week

    The Bunker Review is contributed by Marine Bunker Exchange

    Despite the crisis in Venezuela, which could shut in a lot more oil supply, global oil indexes have been mostly flat for two weeks. Market has weighed prospect of serous outages in Libya, Iran and Venezuela against the unfolding slowdown in the global economy.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), has demonstrated slight upward trend in the period of Feb.07 – Feb.14:
        
    380 HSFO - up from 398.43 to 408.21 USD/MT (+9.78)
    180 HSFO - up from 442.14 to 452.07 USD/MT (+9.93)
    MGO         - up from 617.14 to 620.64 USD/MT (+3.50)


    Fuel indexes were pressured after Russia said there were no substantial talks currently taking place to establish an alliance between Russia and OPEC while a charter outlining open-ended cooperation could be discussed when the two groups meet in April. It was also added that it was highly unlikely OPEC and other oil producers would set up a joint structure due to the additional red tape it would create, as well as the risk of U.S. sanctions against monopolies.  Besides, while Moscow had committed to production cuts with OPEC to boost crude prices, it is unlikely to get any deeper into the cartel's cuts to risk its own oil market share in the long run. Reuters reported on Feb.11 that the OPEC and its allies had drafted a document for setting up a new alliance but had carefully avoided any mention of sensitive issues such as oil prices.

    OPEC cut its forecast for 2019 world oil demand due to slowing economies and expectations of faster supply growth from rivals, underlining its challenge to prevent a surplus even as it starts new production cuts. Forecast for 2019 said demand for its crude would fall to 30.59 million barrels per day, 240,000 bpd less than predicted last month. OPEC also said its oil output fell by 797,000 bpd month on month to 30.806 million bpd in January. That amounts to 86 percent compliance with pledged cuts.

    The U.S. House Judiciary Committee passed a bill that would allow the U.S. Justice Department to sue members of OPEC for manipulating the oil market. The legislation has bipartisan support in the Congress, although it’s not clear where President Trump stands. The so-called NOPEC bill would remove sovereign immunity, exposing member countries to antitrust regulation. If the NOPEC legislation were to become law, it could theoretically make it much more difficult for OPEC to set production limits with the aim of achieving certain price targets. It could also put in jeopardy the formalization of the OPEC/non-OPEC alliance with Russia.

    The U.S. said Iran’s oil customers should not expect new U.S. waivers in May, urging buyers to stop importing Iranian oil. Some of them, including the four major Asian buyers of Iranian oil - China, India, Japan, and South Korea - have recently resumed buying limited volumes of Iranian crude oil, after a period of around a month and a half in which they had to clarify how much and under what conditions they would purchase oil from Iran. Earlier last week, Iran criticized Italy and Greece for not buying Iranian oil despite the fact that they had obtained waivers to do so.

    Another risk to supply comes from Venezuela after the implementation of U.S. sanctions against the OPEC member’s petroleum industry in late January. It is expected this move to knock out 300,000-500,000 bpd of exports. Sanctions also prohibit U.S. diluents from heading to Venezuela. Without diluents, Venezuela cannot process its heavy crude and would be forced to shut down output. However, Russia’s Rosneft is reportedly sending some oil products to Venezuela to keep production from collapsing. As a result, Venezuela’s oil production may not utterly collapse, which could keep Maduro in power further. However, U.S. sanctions could still lead to mass starvation, exploding humanitarian crisis.

    Forces loyal to Libya’s eastern leader Khalifa Haftar have taken control of the country’s biggest oil field (300,000 barrel-per-day production) and say the deposit is secure and ready to resume production. Libya holds Africa’s largest crude reserves, and the lack of clarity about troop movements and security in the south had cast doubt on the nation’s plan to boost output to 2.1 million barrels a day by the end of 2021. Libya’s internal turmoil led the OPEC in December to exempt it from participating in global production cuts.

    U.S. and Chinese trade negotiators are meeting in Beijing this week to try and reach a deal be-fore a March 1 deadline when higher American tariffs on Chinese imports take effect. It was reported President Donald Trump wants to meet Chinese President Xi Jinping very soon, an optimistic sign for investors who are becoming increasingly concerned there won’t be an agreement. Without a comprehensive deal on a range of trade issues, the Trump administration has threatened to increase tariffs on $200 billion worth of Chinese goods from 10 to 25 percent. An increase in tariffs, could tip the global economy into recession, forcing OPEC+ to extend its cuts, although it would leave much more room to take a harder line on Iran. Such an outcome on the trade issue would be hugely negative for oil and fuel prices.

    Lower growth forecasts from the European Union also heightened fears of a global economic slowdown. The European Commission sharply cut its forecasts for euro zone economic growth due to global trade tensions and an array of domestic challenges. Euro zone growth this year would slow to 1.3 percent from 1.9 percent in 2018, before rebounding in 2020 to 1.6 percent.

    It was reported an increase in the number of active oil and gas rigs in the United States last week. The total number of active oil and gas drilling rigs rose by 4 rigs, with the number of active oil rigs increasing by 7 to reach 854 and the number of gas rigs decreasing by 3 to reach 195. The oil and gas rig count is now 74 up from this time last year, 63 of which is in oil rigs. The EIA’s estimates for US production for the week ending February 1 shows an increase at an average rate of 11.9 million bpd? - a record for the US - for the fourth week in a row.

    Outlook for the coming week

    We expect the uncertainty on global fuel market to continue next week followed by irregular changes of bunker prices.  

     

     

     

     

     

     

     

    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)




2020 February 19

18:37 Eni launches hull for Coral Sul FLNG in offshore Mozambique
18:06 Port of Rotterdam aims to become the most sustainable biorefinery in Europe
17:52 NOVATEK’s 2019 profit grew 5.3 times YoY to RUB 865.5 billion
17:31 Royal IHC launches TSHD GHASHA for National Marine Dredging Company
17:28 Wärtsilä and Carnival achieve real-time data exchange between ship and port
17:06 Jan De Nul finishes deepening works in the Port of Maputo
16:46 Port of Hamburg seaborne cargo throughput up 1.1 percent to 136.6 million tons in 2019
16:42 PM Yury Borisov backs RF Transport Ministry’s proposal to assign cargo to Russian-flagged and Russian-owned vessels
16:13 Boston Ship Repair gets Navy's $14.3M contract
15:37 Russia’s market demand for marine fuel to exceed 10 million tonnes in 2020 – PM Yury Borisov
15:10 Inmarsat launches connectivity services in Saudi Arabia across land, sea and air
14:51 FESCO launches new regular container train from Novosibirsk to Khabarovsk
13:48 Russia’s bunker market fell by over 6% YoY to 11 million tonnes in 2019
13:06 Rosneft’s hydrocarbon production in 2019 remained flat YoY at 5.79 mmboed
12:39 Rosneft reports 29-pct increase of its 2019 net income to RUB 708 bln
12:05 Philippine Ports Authority net income soars 31% in 2019
11:47 Konstantin Anisimov appointed as Deputy Head of Federal Marine and River Transport Agency
11:00 Position of the European Federation of Inland Ports (EFIP) on the European Green Deal
10:52 Golar Power forms partnership with BR Distribuidora
10:41 IMO continues its work to counter maritime crime
10:21 MABUX: Bunker market this morning, Feb 19
10:18 Finland accedes to Cape Town Agreement on fishing vessel safety
09:54 Bunker prices go down at the port of Saint-Petersburg, Russia
09:32 Brent Crude futures price is up 1.07% to $58.37, Light Sweet Crude – up 1.05% to $52.84
09:19 Milaha takes part in the Qatar Maritime and Logistics Summit as its main sponsor
09:15 Baltic Dry Index is up to 450 points

2020 February 18

18:00 Petronas signs 12-year time charter party for two new build LNG vessels
17:36 MARAD announces more than $280 million in grants for US ports
17:27 Jotun Marine: Proactive measures needed to improve hull performance
17:06 CMA CGM announces FAK rates from the Mediterranean to USEC and USGULF
16:43 EIB supports refurbishment of Port of Ystad to accommodate climate-friendly vessels
16:21 Oboronlogistics designated as sole executor of works and services related to delivery of goods by sea to Kaliningrad Region
15:36 CMA CGM announces Emergency Space Surcharge for exports from Russia & Baltic
15:33 Stena Bulk and Admiral Makarov University agree to make company-branded class
15:04 Port of Singapore to give 50% port dues concession to passenger vessels
14:40 Borr Drilling enters into new financing arrangement for a newbuild jack-up drilling rig
14:07 Volga Shipping Company to convert three tankers into dry cargo carriers in 2020
13:24 DP World to delist from Nasdaq Dubai
12:48 Bunker prices go down at the Far East ports of Russia (graph)
12:10 E.ON, Rotterdam Port Authority and DeltaPort Niederrheinhäfen agree to develop an infrastructure for freight and passenger ships
11:04 GTT receives two orders from Hyundai Samho Heavy Industries and Hyundai Heavy Industries
10:52 Average wholesale prices for М-100 HFO grew to RUB 10,253 in RF spot market
10:21 MABUX: Bunker market this morning, Feb 18
10:19 Linkspan connection/disconnection service tariff changed at Ust-Luga ferry terminal
09:54 Divers of RF Navy's Black Sea Fleet started preparing for "Depth-2020" competition
09:33 Brent Crude futures price is down 1.13% to $57.02, Light Sweet Crude – down 0.76% to $51.92
09:15 Baltic Dry Index is up to 434 points

2020 February 17

18:37 CMA CGM announces FAK rates from Middle East Gulf & Pakistan to North Europe, the Mediterranean and Red Sea & Red Sea
18:06 European Shipping Week 2020 opens with the latest figures on European shipping
17:50 Gazprom Neft’s supplies of low-sulphur marine fuel to domestic market to exceed 1.5 million tonnes in 2020
17:36 SCHOTTEL secures contract to provide propulsion units for a newly built harbour tug
17:18 BlueWater Reporting issues ISC-North America trade report
17:05 Saga Subsea receives new contract
16:30 IMO’s Sub-Committee on Pollution Prevention and Response meets this week
16:05 Reach Subsea awarded several contracts and call-offs under frame agreements for 2020 execution
15:54 Wärtsilä to supply customized Hybrid Scrubber solution to two Norwegian Cruise Line ships
15:06 Sea Port of Saint-Petersburg's allocations under its social programme totaled RUB 47 million in 2019
14:42 Container throughput of Hong Kong port (China) fell by 20.4% to 1.35 million TEUs in Jan’2020
14:17 Damen holds keel-laying ceremony for Nigerian Navy landing craft
13:38 WFW advices BPER BANCA on Marittima Emiliana financing