• 2018 June 7 15:39

    MABUX: State of high volatility will retain on global fuel market

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have continued firm downward trend during the week. The main factor was news that OPEC and its partners, including Russia, are considering a loosening of their production limits. Additional pressure was added by a report that the U.S. government had asked Saudi Arabia and other major exporters to increase oil output. The spread between the two benchmarks (Brent and WTI) is rare, and reflects uncertainty and confusion in the global fuel market, as well as regional differences in supply and demand.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) also demonstrated downward trend in the period of May.31 – June 07:

    380 HSFO - down from 435.14 to 431,29 USD/MT (-3.85)
    180 HSFO - down from 477.07 to 472,07 USD/MT (-5.00)
    MGO        - down from 692.57 to 674.29 USD/MT (-18.28)

    WTI dropped to a more than $10-per-barrel discount to Brent this week, the widest spread in three years. The pipeline bottlenecks in the Permian are starting to bite. U.S. ex-ports of crude are rising, while Brent-linked cargoes in the Atlantic Basin are struggling to find buyers.

    The U.S. government has asked Saudi Arabia and some other OPEC producers to increase oil production by about 1 million barrels per day (bpd). The request comes after U.S. retail gasoline prices surged to their highest in more than three years and President Donald Trump publicly complained about OPEC policy and rising oil prices. It also follows Washington’s decision to reimpose sanctions on Iran’s crude exports that had previously displaced about 1 million bpd from global markets. The request for extra oil are among the most forceful U.S. intervention in OPEC affairs since Bill Richardson (the energy secretary during the second administration of Bill Clinton, phoned the Saudi minister in the middle of an OPEC meeting in 2000 asking for a production increase). That time the intervention aggravated a dissent between Saudi Arabia and Iran.

    Meantime, Saudi Arabia and Russia committed to ramping up production to as much as 1 million barrels per day before the production cut deal ends at the end of this year, should it be-come a necessary step to meet demand with Venezuela’s falling production and Iran’s possible production or export shortfalls in the wake of US sanctions against it. Oil prices took another blow with Rosneft unexpectedly increasing production by 70,000 bpd. Iran and Kuwait are leading a faction within OPEC accusing Saudi Arabia of capitulating to U.S. and Russian pressure to drive the price of oil down. OPEC meets formally on June 22 to set oil policy. It is expected to agree to raise output.

    Venezuela’s production declined to 1.45 million bpd from 1.50 million bpd in May, compared to the implied target of 1.972 million bpd, which means that Venezuela’s involuntary cut in May was 617,000 bpd-more than the cut pledged. Besides, country is struggling to meet its supply obligations, with dozens of tankers waiting to take on its oil. The back-log is so severe that state-owned PDVSA has told some customers it may declare force majeure.

    Over the past few weeks, Iran has repeatedly sought EU support to offset renewed U.S. sanctions. Tehran wants the EU to help safeguard its oil export revenues, its most important source of income, by enlisting the help of European central banks. Consequently, the EU has been considering bypassing the U.S. financial system by handling oil purchases from Iran in euros in-stead of U.S. dollars.

    The consequences of the U.S. withdrawal from the Iran nuclear deal, the possible Irani-an response, and the actual physical barrels of oil that could be taken off the market are still very much an important factor for fuel prices. One of the most drastic reactions from Iran could be Tehran pulling out of the 1968 Treaty on the Non-Proliferation of Nuclear Weapons (NPT) (a treaty in which 93 countries, including Iran, have vowed never to obtain nuclear weapons).

    President Trump resumed trade war last week, slapping steel and aluminium tariffs on Canada, Mexico and the EU and industrial tariffs on China. The decision comes after offering exemptions to U.S. trading partners in recent months, and comments from the Treasury Secretary just two weeks ago that the trade war would be put on hold. The resumption of a trade war threatens to undermine demand, although the magnitude of the slowdown is hard to predict.

    US oil production is also pressing down on fuel prices, and for the week ending June 01, reach-ing 10.8 million bpd—the fifteenth build in as many weeks. US production continues to climb at a time when OPEC is obliged to a supply cut deal. When the deal was announced, the United States was producing 8.6 million bpd. Today, the US is producing more than 2.0 million bpd over that figure. US drillers also added 2 rigs to the number of oil rigs last week. The oil and gas rig count now stands at 1,060—up 144 from this time last year.

    The shipping industry is going to scrap the largest number of oil tankers this year in over a half-decade. The pace of scrapping comes after years of overcapacity and low rates, with the OPEC cuts also hurting demand for shipping. It is expected, that the poor market conditions will last until next year, but the removal of excess capacity will help.

    The market doesn’t know at the moment where the price of oil/fuel is going to be and probably doesn’t know where it should be, and so it’s open to some major price fluctuations. We expect a state of high volatility will retain on global fuel market. Bunker prices may continue slight downward trend next week.

     

     

     

     

     

     

     

    All prices stated in USD / Mton
    All time high Brent = $147.50 (July 11, 2008)
    All time high Light crude (WTI) = $147.27 (July 11, 2008)




2020 July 9

17:31 Bunker prices are flat at the Far East ports of Russia (graph)
17:28 Port of Rotterdam to start trial with PIN-free container handling
17:18 Damen holds keel-laying for Port of Auckland’s fully electric RSD-E Tug 2513
17:12 Diana Shipping announces time charter contract for m/v Selina with ST Shipping
16:44 "K" Line participates in JV for FPSO owning and chartering business offshore Brazil
16:23 Jan De Nul Group has started offshore installation activities in Taiwan
16:06 Port of Liepaja throughput in 6M’2020 fell by 15.6% Y-o-Y
15:48 Russia remains in Paris MOU’s White List
15:24 PD Ports submit response to national Freeport consultation
15:03 Khabarovsk Territory Governor Sergey Furgal detained by officials of Russia’s Investigative Committee
14:39 Aibel awarded Oseberg portfolio agreement
13:47 Ukraine is still on Paris MOU’s Black List
13:22 MOL announces joint development of energy-saving rudder
12:50 Container shipments on Russian Railways’ network up 15% in 1H 2020
12:17 Cargo transhipment in North Sea Port falls by more than 11% in first half of year
12:07 ABB teams up with Yinson on offshore oil and gas project in Brazil
11:20 FPSO operators could save £15 million per asset on maintenance
10:42 The CMA CGM Group commits to fight illicit trafficking in protected species and tightens its shipment control procedures
10:10 Unifeeder contracts We4Sea for fleetwide vessel performance monitoring
09:38 MABUX: Bunker market this morning, July 09
09:29 Oil market sees mixed price movements
09:13 Baltic Dry Index as of July 8

2020 July 8

18:11 Carnival Cruise Line sets ship delivery changes and related deployment plans
17:50 POWERGLOBE seeks for 10 years LNG vessel charter-agreement
17:27 Maritime partners unveil Autonomous Guard Vessel
17:03 THE Alliance announces COVID-19 response measures for August 2020
16:48 SaR operation in Singapore: man overboard incident
16:20 Throughput of Rostov-on-Don port in 6M’2020 grew by 10% Y-o-Y
16:13 Maritime industry calls for EU political leadership on seafarers
15:23 Port of Antwerp total throughput down by 4.9% in H1 2020
14:03 Wärtsilä introduces the system, designed to reliquefy boil-off gas onboard gas carriers and LNG bunker vessels
13:45 RF State Duna adopts a package of laws on privileges in the Arctic
13:12 PD Ports wins major pipeline contract with Global Manufacturer at Hartlepool
12:44 DCSA publishes standards for digital exchange of operational vessel schedules
12:18 Germany takes over HELCOM chairmanship
12:11 Seanergy Maritime announces agreement to acquire a Capesize vessel with prompt delivery
11:55 Russian Fishery Company fleet renewal to reduce carbon footprint by 50%
11:29 Pella Shipyard delivers patrol boat of Project 03160
11:04 Austal delivers first of two 118 metre trimarans to Fred. Olsen Express
10:43 Barcelona Cruise Port obtains the 'Safe Travels' Stamp, as safe infrastructures preventing COVID-19
10:32 Throughput of Rosterminalugol in HI’2020 grew by 10% YoY
10:04 ESPO says EU Taxonomy should align with already defined sectoral sustainability criteria
09:40 Oil prices continue decreasing
09:37 MABUX: Bunker market this morning, July 08
09:23 Bunker prices rose at the Port of Saint-Petersburg, Russia (graph)
09:08 Baltic Dry Index as of July 7

2020 July 7

18:06 ZIM unveils new digital services
17:49 Great Arctic Regatta started in Saint Petersburg
17:27 Crude exports via Kozmino in HI’2020 grew by 5% YoY
17:02 Deepsea Atlantic drilling rig returning to Johan Sverdrup
16:35 Optimarin successfully completes IMO G8 and USCG test programme
16:12 Alfa Laval takes its service offer to the next level through remote service guidance
15:56 New ferry line Baltic Link launched at the port of Riga
15:28 RF Government allocates RUB 320 million to subsidize shipping companies
15:02 ABP delivers project cargo using North Lincolnshire’s waterways
14:32 Air Liquide and the Port of Rotterdam Authority launch initiative for hydrogen road transport
14:02 Konecranes to deliver mobile harbor crane to new terminal in Trieste
13:46 Bunker prices rise at the Far East ports of Russia (graph)
13:32 KNOT concludes long-term charter contract with PetroChina for shuttle tanker
13:11 CMA CGM announces GRR from Asia to West Africa