MABUX: Bunker Market this morning March, 19

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. 18

380 HSFO - USD/MT 421.21 (-3.50)
180 HSFO - USD/MT 469.07 (-2.22)
MGO         - USD/MT 638.36 (-3.78)

Meantime, world oil indexes demonstrated irregular changes on Mar. 18 supported by the prospect of prolonged OPEC-led oil supply curbs and signs of inventory declines at the delivery point for U.S. crude futures

Brent for May settlement increased by $0.38 to $67.54 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for April delivery rose by $0.57 to $59.09 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 8.45 to WTI. Gasoil for April delivery decreased by $1.75.

Today indexes rise supported by supply cuts led by OPEC+. U.S. sanctions against oil producers Iran and Venezuela are also boosting prices

OPEC and its allies met in Azerbaijan to monitor their crude supply reduction pact, where they said they would exceed commitments in the coming months. A ministerial panel of OPEC and its allies recommended that they cancel the extraordinary meeting scheduled for April 17-18 and hold the next regular talks on June 25-26.

On Mar.17, Saudi Arabia signaled the producers may need to extend supply cuts past June into the second half of 2019 amid OPEC’s job in rebalancing the oil market was far from done as global inventories were still rising despite U.S. sanctions on Iran and Venezuela. Russia also said production cuts would stay in place at least until June, when Washington’s next steps on reducing Iran’s and Venezuela’s oil exports become clearer. Russia has been slow to cut its oil output in line with January targets, saying it is difficult to do so in winter. Saudi Arabia has therefore cut its own oil output to well below its targets to compensate for other producers.

The United States has been increasing its own oil exports steeply in recent months while imposing sanctions on Venezuela and Iran to reduce their shipments to global markets.
Washington’s policies have introduced a new level of uncertainty for OPEC as it struggles to predict the balance of global supply and demand.

At the same time, signs of a reduction in crude inventory levels at the U.S. storage hub in Cushing, Oklahoma also boosted futures. Crude stockpiles at Cushing, the delivery point for WTI, fell 1.08 million barrels last week. Surging oil output in the United States has helped to offset the OPEC-led curbs.

Concerns about a global economic slowdown also weighed on oil prices after data showed Japan’s exports fell for a third month in February. Europe, China and the U.S. economy statistics sound also weak, raising doubts about global oil demand.

The United States has imposed stiff sanctions on OPEC’s third largest oil producer, Iran, but has given some waivers to buyers of its crude until May. Washington is also trying to oust Venezuela’s current president, Nicolas Maduro, and has imposed sanctions on that country’s oil.

The energy minister of OPEC’s de facto leader, Saudi Arabia, said the market was looking oversupplied until the end of the year but that April would be too early for any decision on output policy.

We expect bunker prices to demonstrate irregular changes today: USD 1-3 up for IFO, USD 1-3 down for MGO.