MABUX: Bunker market this morning, June 20
The Bunker Review was contributed by Marine Bunker Exchange
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) slightly rose on June 19:
380 HSFO – USD/MT – 387.56 (+5.74)
180 HSFO – USD/MT – 427.58 (+4.84)
MGO – USD/MT – 638.50 (+2.75)
Meantime, world oil indexes slightly declined on Jun. 19 after official government data showed a larger-than-expected fall in U.S. crude inventories.
Brent for August settlement declined by $0.32 to $61.82 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for August delivery fell by $0.14 to $53.97 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 8.06 to WTI. Gasoil for July lost $2.25.
Today morning oil indexes turned into moderate upward evolution.
The Energy Information Administration said in its regular weekly report that crude oil inventories decreased by 3.11 million barrels in the week to June 14. That was compared to forecasts for a stockpile draw of 1.08 million barrels after a build of 2.21 million barrels in the previous week.
U.S. Secretary of State Mike Pompeo said U.S. doesn’t want war with Iran but keeps option on the table. While the U.S. says Iran was behind the tanker attacks, some countries doubt if there is enough evidence. Meanwhile, Iran said its uranium enrichment would breach the limits of the 2015 nuclear deal within 10 days if Europe did not help it circumvent U.S. sanctions. President Trump seemed to downplay the conflict, calling the tanker attacks very minor, indicating a disagreement within his administration.
The International Energy Agency (IEA) cut its oil demand growth forecast last week—by 100,000 bpd from last month to a current estimate of 1.2 million bpd growth for 2019—a second consecutive downward revision in its monthly reports. The IEA also warned that world trade growth has slumped to its slowest rate since the 2008/09 financial crisis and the consequences for oil demand are becoming apparent. The IEA, however, noted that there is optimism that the latter part of this year and next year will see an improved economic picture.
Saudi Arabia is cutting its oil output and is asking other producers for restraint in production, as signs of slowing global demand for crude outweigh threats of war and worries about supply disruptions in the Middle East. That could take 300,000 to 400,000 bpd off of the market.
A group of leading banks will for the first time include efforts to cut carbon dioxide emissions in their decision making when providing shipping company loans. International shipping accounts for 2.2% of global carbon dioxide (CO2) emissions and the U.N.’s International Maritime Organization (IMO), has a long-term goal to cut greenhouse gas emissions by 50% from 2008 levels by 2050. So 11 banks have established a framework to measure the carbon intensity of shipping finance portfolios. The banks involved in the “Poseidon Principles” initiative, which will set a common baseline to assess whether lending portfolios are in line or behind the adopted climate goals set by the IMO, represent around a fifth or $100 billion (£79.7 billion) of the total global shipping finance portfolio.
Because of the tanker attacks in the Gulf of Oman, insurance costs have spiked. War risk premiums that owners pay each time they go to the Persian Gulf have now surged to at least $185,000 for supertankers. They rose to $50,000 after the attacks a month ago. Both owners and the companies that charter their ships paused bookings in the immediate aftermath of attacks on Jun.13 as they re-evaluated risks to oil from the Middle East in the wake of attacks on two more tankers just a month after similar incidents.
Argentina suffered through a nationwide blackout, which even stretched into parts of Uruguay and Paraguay. The blackout started with a failure in the country´s interconnection system, known as SADI, but the root cause of the outage remained unknown and the results of a full investigation would not be available for 10 to 15 days. The blackout comes amid a deepening economic crisis in Argentina that has plunged nearly a third of the country into poverty, pushed interest rates skyward and sent the peso tumbling against the dollar, prompting mass protests throughout the country.
We do not expect any drastic changes in bunker prices today: fluctuations in a range of plus-minus 1-3 USD may prevail.