MABUX: Bunker market this morning, Jan 21
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 irregular changes on Jan.20:
380 HSFO: USD/MT – 379.36 (+0.18)
VLSFO: USD/MT – 627.00 (-3.00)
MGO: USD/MT – 674.21 (-1.66)
Meantime, world oil indexes rose on Jan.20 after two large crude production bases in Libya began shutting down amid a military blockade and Iraqi Supply Disruption
Brent for March settlement increased by $0.35 to $65.20 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for March increased by $0.22 to $58.76 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $6.44 to WTI. Gasoil for February delivery added $8.00.
Today morning oil indexes retreat after yesterday’s gaining.
Two major oilfields in southwest Libya began shutting down on Jan.19 after forces loyal to Khalifa Haftar closed a pipeline, potentially cutting national output to a fraction of its normal level. The closure, which follows a blockade of major eastern oil ports, risked taking almost all the country's oil output offline (about 800.000 barrels per day).
Also on Jan.19, foreign countries agreed at a summit in Berlin to shore up a shaky truce in Libya, even as the talks were overshadowed by the latest blockade. German Chancellor Angela Merkel told that the Berlin summit had agreed that a tentative truce in Tripoli over the past week should be turned into a permanent ceasefire to allow a political process to take place.
If Libyan exports are halted for any sustained period, storage tanks will fill within days and production will slow to 72,000 barrels per day bpd. Libya has been producing around 1.2 million bpd recently.
However, the earlier rise in oil prices eased after some said supply disruptions in Libya will be short-lived and could be offset by other producers, limiting the impact on global markets.
Anti-government unrest in Iraq, another major oil producer, also had initially supported oil prices, but officials later said production in southern oilfields has not been affected by the unrest. Escalating protests in Iraq have led to a halt in production at the Al Ahdab oil field, which pumps some 70,000 bpd. Al Ahdab is operated by China’s CNPC, but it has been blockaded by security guards who are protesting against the absence of permanent employment contracts. The other field at risk of closure, Badra, produces about 50,000 bpd. Russia’s Gazprom Neft is the operator of that field.
The IMF reduced its forecast for global growth this year to 3.3% from 3.4% in October. The forecasts for the U.S. and euro zone were both revised down by the same amount. The Fund also cut the forecast for 2021 by 0.2 percentage point to 3.4%, citing the slowdown in India and other emerging markets as additional factors.
Market activity was thin on Monday on the Martin Luther King Jr. holiday in the United States.
We expect bunker prices will increase today: 1-3 USD up for IFO, 6-8 USD up for MGO.