• 2019 January 31 17:05

    MABUX: Bunker prices may continue the phase of irregular changes

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have changed irregular during the week. The selling was primarily driven by two factors:  worries over a global economic slowdown and renewed concerns over U.S.-China relations. Underpinning the market were the OPEC-led supply cuts and political turmoil in Venezuela, which could lead to a supply disruption.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), has demonstrated slight upward trend in the period of Jan.24 – Jan.31:
        
    380 HSFO - up from 379.86 to 388.00 USD/MT (+8.14)
    180 HSFO - up from 424.43 to 432.43 USD/MT (+8.00)
    MGO        - up from 601.36 to 608.79 USD/MT (+7.43)

    Venezuela has been rocked by turmoil last week. The U.S., clearly seeking regime change in Venezuela, recognized the head of the national assembly, Juan Guaido, as the rightful president, which corresponded with massive nation-wide protests. However, the military supported President Maduro. In the meantime, Venezuela’s oil production is expected to continue to decline. Guaido has offered some details on new plans for the oil sector, including new picks to head up Citgo and PDVSA. He is trying to obtain control of the country’s oil assets, but with the military backing Maduro for now, there is no sign of an imminent downfall. Developments in Venezuela take on an even greater importance for the oil market considering that the country holds the rotating presidency of OPEC this year.

    Meantime, the U.S. Treasury Department imposed sanctions on Venezuelan state-owned oil firm PDVSA. As a result, all property and interests in property of PDVSA subject to U.S. jurisdiction were blocked, and U.S. persons were generally prohibited from engaging in transactions with them. The move may cost Venezuela as much as $11 billion a year.

    According to a survey by DNV GL, the majority of top energy Companies see an uptick in spending this year. The survey finds that 70 percent of respondents planned to either maintain or increase capex this year, compared to just 39 percent in 2017. Despite greater oil price volatility in recent months, research shows that the sector appears confident in its ability to better cope with market instability and long-term lower oil and gas prices. For the most part, industry leaders now appear to be positive that growth can be achieved after several difficult years.

    Prices were supported by reassurances from Saudi Arabia that it will continue to rein in output in response to the slowdown in the world economy that has hit expectations for oil demand. Saudi Arabian oil minister Khalid al-Falih said that the kingdom will reduce its oil output again in February and continue to pump at well below the level agreed by OPEC and its allies through June.

    Russia said that it should stick with the OPEC+ production cuts and avoid a price war with U.S. shale drillers. As per Russia, only oil prices at $40 per barrel and below may push U.S. shale production to go down, but that is not healthy for the Russian economy. So there is no reason to take competitive action to destroy U.S. shale production.

    China’s crude oil demand has picked up this month, as independent refiners are looking to buy more crude for March and April delivery to restock supplies while oil prices are still relatively low. Independent refiners contributed a lot to China’s 30-percent jump in crude oil imports in December compared to a year earlier. The surge was the result of independent refiners rushing to exhaust their import quotas before the end of last year. This pushed the daily rate of shipments into China to 10.31 million bpd. That was the second month in a row when Chinese refiners imported more than 10 million bpd of crude oil.

    The American Petroleum Institute reported that a number of records were broken in the energy industry of the United States in December, including gasoline demand, crude oil production, and crude oil exports. Gasoline demand in the U.S. in 2018 had stayed at a high of 9.3 million barrels daily, the same as during the previous two years. Over the four weeks to January 18, the Energy Information Administration reported gasoline inventory builds reaching a combined 26.6 million barrels, with the total at 259.6 million barrels, which was the highest inventory level on record. Crude oil production reached 11.7 million bpd as of December 2018, with exports at 2.4 million bpd on average during the same month, flat on November but a lot strong-er than in the first months after the removal of the oil export moratorium.

    U.S. energy firms last week increased the number of rigs looking for new oil for the first time since late December by 10 to 862. But the rig count in January fell the most in a month since April 2016, as the boom in the Permian, the nation's biggest shale oil formation, cools. More than half the total U.S. oil rigs are in the Permian where active units rose by three last week to 484, well short of a near four-year high of 493 in November. All in all the U.S. rig count is still much higher than a year ago when 759 rigs were active after energy companies boosted spend-ing in 2018 to capture higher prices that year. In 2019, however, drillers have said they plan to remove rigs due in part to forecasts for lower crude prices than last year.

    There are still big risks for the disruption in the oil supply mix. The International Maritime Organization (IMO) has rules on marine fuels that take effect at the start of 2020. Those rules re-quire ships to cut the concentration of sulfur in their fuels significantly. That means that ships will have to stop running on heavy fuel oil, which is high in sulfur. To replace dirtier fuels, many ships will switch to middle distillates. That may ease the pressure on heavier sour oils, but it could also put even more pressure on diesel and gasoil supplies.

    Freight rates for dry-bulk container ships have declined sharply over the last six months, a sign of flagging trade and a broader global economic slowdown. The Baltic Dry Index, which measures ship transport costs, has fallen by 47 percent since mid-2018.

    Outlook for the coming week

    The global fuel market is now characterized by very quick changes to supply/demand balances. We expect some instability in bunker prices while the phase of irregular changes may continue.

     

     

     

     

     

     

     

    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 10

12:13 Nuclear-powered icebreakers of Rosatomflot assisted 462 ship calls in winter-spring navigation season
11:35 Construction commences on Austal's largest ever ferry
11:04 GIWACAF launches webinar series on oil spill preparedness and response
10:46 FSUE “Rosmorport” takes award-winning place in the annual sailing regatta
10:32 LR to develop structural digital twin for Bluewater FPSO Glas Dowr
10:22 Rosmorport changes tariffs on berth assignment services in Astrakhan and Olya seaports
09:59 Bunker prices are slightly up at the Port of Saint-Petersburg, Russia (graph)
09:37 Oil prices decrease amid concern over demand recovery rates
09:20 Baltic Dry Index as of July 9
09:11 MABUX: Bunker market this morning, July 10

2020 July 9

19:03 OOCL receives Gold Award from the HKAEE for the fourth time
18:10 Aquila Power Catamarans announce a luxuriously versatile new model
17:55 Tallink Grupp’s vessel Sailor to operate on Paldiski-Kapellskär Route from Sunday
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