MABUX: Bunker market this morning, Dec 30
The Bunker Review was contributed by Marine Bunker Exchange (MABUX)
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) demonstrated upward changes on December 27:
380 HSFO: USD/MT – 379.60 (+4.05)
180 HSFO: USD/MT – 416.75 (+4.05)
MGO: USD/MT – 701.70 (+6.99)
Meantime, world oil indexes rose slightly on Dec.27.
Brent for February settlement increased by $0.24 to $68.16 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for February rose by $0.04 to $61.72 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $6.44 to WTI. Gasoil for January delivery increased by $3.00.
Today morning oil indexes are stable underpinned by optimism over an expected U.S-China trade deal, while traders kept a close eye on the Middle East following a U.S. air strike.
In the Middle East, the United States carried out air strikes on Dec.29 in Iraq and Syria against the Kataib Hezbollah militia group, while protesters in Iraq on Dec.28 forced the closure of its southern Nassiriya oilfield. U.S. officials said the air strikes in response to the killing of a U.S. civilian contractor in a rocket attack on an Iraqi military base were successful, but warned that "additional actions" may still be taken.
On Dec.29, China's Commerce Ministry said it is in close touch with the United States on the signing of a long-awaited trade deal. The two countries on Dec. 13 announced a "Phase one" agreement that reduces some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of American farm products and other goods.
Iraq's oil ministry said the production halt at the Nassiriya oilfield will not affect the country's exports as it will use additional output from southern oilfields in Basra. Elsewhere, Libyan state oil firm NOC said it is considering the closure of its western Zawiya port and evacuating staff from the refinery located there due to clashes nearby.
At the same time, oil prices edged higher after the Energy Information Administration reported an inventory draw of 5.5 million barrels for the week to December 20 in its last weekly petroleum status report for 2019. At 441.4 million barrels, inventories were some 2 percent above the seasonal average.
Oil indexes were also boosted by moves by the Organisation of the Petroleum Exporting Countries and other producers, including Russia, to curb production. OPEC+ this month decided to prolong its oil output restriction deal until the end of March and to deepen the cuts in order to balance out the oil market. Russian Energy Minister Alexander Novak said on Friday OPEC+, may consider wrapping up their oil output reduction in 2020.
According to Baker Hughes The final US oil rig count for the year decreased last week by 8. The number of oil rigs have declined by 207 this year alone, but production has grown from 11.7 million bpd at the beginning of the year to 12.8 million bpd, for week ending Dec 20—just 100,000 bpd off the all-time high from a few weeks ago.
The spread between delivered marine fuel 0.5% and delivered 380 CST high sulfur bunker fuel in Singapore has widened to a new record high of $420/mt, with less than one week to go before IMO 2020 begins. Steady demand and tight prompt delivery boosted MF 0.5% bunker differentials over the last couple of weeks. In contrast, buying activity has rapidly declined for 380 CST high sulfur bunker fuel since November, ahead of the International Maritime Organization’s 0.5% sulfur mandate, which starts January 1.
Following the trend in Singapore, the price spread between delivered MF 0.5% and HSFO also hit new record highs across major ports in North Asia, following stronger demand for low sulfur fuel oil and shrinking appetite for HSFO.
We expect bunker prices will demonstrate little changes today: within plus/minus 1-3 USD.
We wish Happy New Year to all of our readers and subscribers! May the next year to bring you a lot of joy and happiness!