MABUX: Bunker market this morning, Mar.11

The Bunker Review was contributed by Marine Bunker Exchange

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs declined on Mar. 08:

380 HSFO - USD/MT 419.43 (-2.43)
180 HSFO - USD/MT 468.14 (-1.22)
MGO - USD/MT 642.07 (-1.00)

Meantime, world oil indexes decreased on Mar. 08 after disappointing U.S. job growth revived concerns about a slowing global economy and weaker demand for oil.

Brent for May settlement decreased by $0.56 to $65.74 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for April delivery declined by $0.59 to $56.07 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 9.67 to WTI. Gasoil for March delivery fell by $12.00.

U.S. jobs data for February showed the creation of only about 20,000 jobs versus market expectations for 181,000 new positions. European Central Bank said, that the European economy was in a period of continued weakness. The European and U.S. economic weakness comes as growth in Asia is also slowing.

At the same time Chinese economic data threw up conflicting statistics. February exports in the world's second-largest economy fell 21% from a year earlier, representing the biggest drop in three years amid a drop of 5.2% in imports. While oil demand in China has so far held up with crude imports staying above 10 million bpd, the slowdown in economic growth is likely to dent fuel consumption and pressure prices.

To counter OPEC cuts, U.S. oil production is reaching new highs, with output already above 12 million bpd and racing toward the next target of 13 million bpd, according to the U.S. Energy Information Administration.

Today morning oil indexes are rising as Saudi Arabia oil minister Khalid al-Falih said there will be no OPEC+ output policy change until June.

Saudi oil minister Khalid al-Falih said on Mar.10 that China and the U.S. would lead healthy global demand for oil this year but that it would be too early to change OPEC+ output policy at the group's next meeting in April. OPEC and its allies will meet in Vienna on April 17-18 and another gathering is scheduled for June 25-26.

On the supply side, oil has received support this year from output cuts led by the OPEC. Saudi Arabia’s crude oil production in February fell to 10.136 million barrels per day (bpd). That proves that OPEC’s largest producer was cutting more than pledged under the OPEC+ production deal that began in January. Since the start of March, the rally in oil has made little headway, a stark contrast to the gains of more than 20% in WTI and Brent through February that came from hefty production cuts by the OPEC+ alliance of 25 oil producing countries.

Indexes were also supported by U.S. energy services firm Baker Hughes' latest weekly report showing the number of rigs drilling for new oil production in the United States fell by nine to 834.

Iran's oil ministry said on Mar.10 that it had been receiving revenues from selling oil despite difficulties caused by U.S. sanctions, denying allegations made by former President Mahmoud Ahmadinejad over government mismanagement in the energy sector. The ministry's statement also said it had tried to prevent problems with oil revenues being stolen as happened when the earlier sanctions were in effect. Under the current U.S. sanctions, eight countries - including China, India, South Korea and Japan - have been given temporary exemptions.

We expect bunker prices to decline today: USD 1-3 down for IFO, USD 8-10 down for MGO.