MABUX: Bunker market this morning, Dec 10
The Bunker Review was contributed by Marine Bunker Exchange (MABUX)
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO Gasoil) in the main world hubs) demonstrated slight upward changes on December 09:
380 HSFO: USD/MT 329.58 (+0.64)
VLSFO: USD/MT 403.00 (+3.00)
MGO: USD/MT 472.05 (+1.82)
Correlation between the Market Bunker Price Index (MBP) vs MABUX Digital Bunker Price Index (DBP) in four major hubs on Dec.09 still showed overcharging of VLSFO bunker grades in all selected ports. At the same time, 380 HSFO is overcharged in Fujairah and Houston, while it is undercharged in Rotterdam (-7 USD) and Singapore (-1 USD). MGO LS remained undervalued in all ports except of Houston (+ 9 USD)
Meantime, world oil indexes were steady on Dec.09 amid unexpected jump in U.S. crude stockpiles and optimism that a fast rollout of a coronavirus vaccine would support the recovery in global oil demand.
Brent for February settlement increased by $0.02 to $48.86 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January fell by $0.08 to $45.52 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.34 to WTI. Gasoil for December delivery lost $3.50.
Today oil indexes increase buoyed by a COVID-19 vaccine rollout in Britain and the imminent approval of a vaccine in the United States.
Vaccinations could start as soon as this weekend in the United States, with a panel of advisers to meet today to discuss whether to recommend to the Food and Drug Administration emergency use authorization of the Pfizer/BioNTech vaccine. Canada approved its first COVID-19 vaccine on Dec.09 and said inoculations would start next week.
Oil prices were also gained some support after two wells at a small oilfield in northern Iraq were set ablaze in what the government called a "terrorist attack", though production was not affected.
According to the Energy Information Administration (EIA), U.S. crude inventories rose by 15.2 million barrels to 503.2 million barrels last week, compared with expectations for a 1.4 million-barrel drop. U.S. net imports of crude oil rose by 2.7 million barrels per day last week. Distillate stockpiles, which include diesel and heating oil, rose by 5.2 million barrels last week against expectations for a 1.41 million barrel increase. Refinery crude runs rose by 424,000 barrels. U.S. gasoline inventories rose by 4.22 million barrels compared with expectations for a 2.27 million-barrel build.
U.S. crude oil production is expected to fall by 910,000 barrels per day (bpd) in 2020 to 11.34 million bpd, a steeper decline than its previous forecast for a drop of 860,000 bpd. Output next year is expected to slide by 240,000 bpd to 11.10 million bpd, a smaller decline compared to the previous forecast for a slide of 290,000 bpd.
U.S. shale production has languished as oil prices collapsed after the coronavirus pandemic eroded global demand. But as hopes for a widespread rollout of a vaccine rise, U.S. crude oil production has recovered from the two-and-a-half-year lows touched in May. Producers have begun to add drilling rigs and brought wells back online in response to the rebound in prices.
The U.S. Energy Information Administration also cut its 2021 world oil demand growth forecast by 110,000 barrels per day to 5.78 million bpd. In its monthly forecast, the agency cut its oil demand growth estimate for 2020 by 240,000 bpd to 8.85 million bpd.
We expect bunker prices may demonstrate slight irregular changes today: plus/minus 1-3 USD for IFO and for MGO.
