MABUX: Bunker market this morning, Jan 15
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 downward changes on January 14:
380 HSFO: USD/MT – 384.68 (-4.14)
VLSFO: USD/MT – 545.00 (-6.00)
MGO: USD/MT – 690.45 (-11.29)
Meantime, world oil indexes increased on Jan.14 amid hope for global growth as the market focused on the signing of a preliminary trade deal between the United States and China.
Brent for March settlement increased by $0.29 to $64.49 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for February rose by $0.15 to $58.23 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $6.26 to WTI. Gasoil for February delivery increased by $2.50.
Today morning oil indexes slight down after the American Petroleum Institute (API) reported that U.S. crude stockpiles rose.
According to API U.S. crude inventories were up by 1.1 million for the week ended Jan. 10. For the forthcoming Energy Information Administration report, which is due later in the day, it is expected a crude inventory decline of 750,000 barrels.
China’s foreign trade rebounded well above expectations in December. Exports came in 7.6% up on the year, while imports rose by an even more impressive 16.3%. Imports of crude showed the third-highest monthly number ever 45.48 million tons - an average of 10.7 million barrels a day - in December.
The numbers were arguably inflated by a last-minute dash by independent refiners to fill their import quotas before year-end but they still appeared to point to Chinese industrial activity recovering.
Moreover, China and the U.S. are scheduled to sign a trade pact on today. The exact details of the deal aren’t known yet, but earlier on Jan.14 the U.S. authorities dropped the designation of China as a currency manipulator. This reverses a move made last summer when relations were at a low point.
The U.S. Energy Information Administration (EIA) in its Short-Term Energy Outlook raised 2020 forecasts for West Texas Intermediate and Brent crude oil prices and said it expects to see U.S. crude-oil production reach new records in 2020 and 2021. The EIA pegged its 2020 WTI oil forecast at $59.25 a barrel ( up 7.7% from its previous view) and its Brent crude price forecast to $64.83(up 7.1%) for 2020. The agency also expects U.S. crude production of 13.30 million barrels a day this year, and 2021 output seen at 13.71 million barrels a day. For 2020, total world output of crude oil and liquid fuels are forecast at 102.37 million barrels a day, while total consumption is seen at 102.11 million barrels a day.
However, price gains were capped by receding Middle East tensions, with both Tehran and Washington desisting from any further escalation after this month’s clashes.
Elsewhere, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said his country will work for oil market stability at a time of heightened U.S.-Iranian tension and wants to see sustainable prices and demand growth. He said it was too early to talk about whether the OPEC&+ would continue with production curbs set to expire in March.
The situation in Tehran continued to make headlines as Iranians took to the streets to condemn the Islamic Republic’s leadership after Tehran’s forces accidentally shot down a Ukraine Airlines flight.
We expect bunker prices to demonstrate slight upward changes: 1-3 USD up for IFO, 1-3 USD up for MGO.