MABUX: Bunker market this morning, Mar.22

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) rose slightly on Mar.21:

380 HSFO - USD/MT - 421.93(+2.43)
180 HSFO - USD/MT - 470.14(+2.64)
MGO - USD/MT - 638.93(+1.00)

Meantime, world oil indexes traded fell on Mar.21, but still held near 2019 highs.

Brent for May settlement fell by $0.64 to $67.86 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for May delivery slid by $0.25 to $59.98 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of7.88 to WTI. Gasoil for April delivery lost $8.25.

Today morning oil indexes were stable.

As per UAE, OPEC and its non-OPEC allies could sign in June a pact to make their oil market-managing policies formal. The charter is ready and has been sent to different countries to look at it, however, questions remain regarding when and where it could be signed and who would actually be signing it. Russia, however, signaled at the end of 2018 that formalizing the alliance may not be such a good idea due to the additional bureaucracy and to the risk of falling prey to a proposed U.S. legislation that could open the cartel and allies to antitrust lawsuits.

India is selling fuels to Venezuela from India and Europe to sidestep sanctions that bar U.S.-based companies from dealing with state-run PDVSA. It had been supplying alkylate, diluent, naphtha and other fuel to Venezuela through U.S.-based subsidiary before Washington in late January imposed sanctions aimed at curbing the OPEC member’s oil exports and ousting President Nicolas Maduro. At least three vessels chartered by the Indian conglomerate supplied refined products to Venezuela in recent weeks, and another vessel carrying gasoil is expected to set sail to the South American nation as well.

In the end of last year it was reported that Iranian tankers were turning off their transponders to hide the destination of their journeys. At the time, most tanker tracking data came precisely from transponders and port authorities, which made most Iranian tanker movement reports unreliable. This, in turn, contributed to the October-December oil price drop when it emerged that Iran was shipping more crude abroad than previously believed. As a new step in economic sanctions against Iran, the United States is now targeting vessels transporting Iranian crude oil in violation of sanctions. The U.S. also warned that everyone involved in the transport and ship-to-ship transfer of Iranian oil in defiance of sanctions will be held accountable by Washington.

The market found some support in bullish U.S. employment figures. The number of Americans filing applications for unemployment benefits fell more than expected last week, pointing to still strong labor market conditions, though the pace of job growth has slowed after last year’s robust gains.

U.S. crude oil production, particularly in the Gulf Coast region, is still increasing. However, since most of the oil produced in the U.S. is light sweet crude, the U.S. still has to rely on heavier crude blends from Saudi Arabia, Venezuela and others since most American refineries are configured to process heavy crude. At the same time, a surplus of light sweet crude allows the U.S. to export more oil as well. U.S. crude production returned to its record of 12.1 million bpd last week, making America the world’s biggest producer.

The restart of Libya’s largest oil field, the Sharara, has helped boost the country’s output. Production was around 900,000 barrels a day three weeks ago but now production is in the range of 1.2 million barrels a day.

We expect bunker prices may demonstrate slight downward trend today in the range of minus 4-7 USD/MT.