MABUX: Bunker market this morning, Apr.30

MABUX: Bunker market this morning, Apr.30.

 

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) turned into downward evolution on Apr.29:

 

380 HSFO - USD/MT - 436.36(-7.28)

180 HSFO - USD/MT - 484.21(-7.00)

MGO - USD/MT - 653.79(-8.00)

 

Meantime, world oil indexes changed irregular on expectations rising output from the United States and producer club OPEC would offset most of the shortfall expected from U.S. sanctions on Iran.

 

Brent for June settlement decreased by $0.11 to $72.04 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for June delivery gained $0.20 to $63.50 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 8.54 to WTI. Gasoil for May delivery rose by $7.25.

 

Today morning oil index have slight downward trend.

Global market is optimistic about OPEC leader Saudi Arabia being able to fill the gap left by lower Iranian oil exports. However, looking at the ongoing discussions between OPEC’s two key members, Saudi Arabia and the UAE, there are no real signs that the Kingdom will be willing to increase its overall oil production to keep prices low in oil importing nations. The efforts to stabilize the market could result in an oversupply situation in the short term. On the other hand, at present all signs point to higher oil prices. If no real additional oil is brought onto the market, shortages will become visible within months.

 

OPEC sources said neither OPEC Secretary General HE Mohammad Sanusi Barkindo nor Saudi officials have spoken with President Trump about lowering gasoline prices. President Donald Trump told reporters that he had called up OPEC, telling the group to move to reduce gasoline prices. It was unclear, however, whether the President was referring to a specific OPEC member or members, or whether he was referring to the group as a whole.

 

Another major issue: oil importing countries, such as China or India, will use the next couple of weeks to negotiate new oil contracts with Iran. These volumes could partly destabilize the market if other OPEC producers will increase production to squeeze Iran out of the market. The most sensible approach would be a further tightening of the market resulting in a draw from the still elevated global storage but without creating a shortage.

 

OPEC has another meeting scheduled in Vienna, Austria on June 25, when the participating nations will discuss whether or not they will extend their prior agreement to slash OPEC producers’ output by 1.2 million b/d to continue past the end of June. The current agreement, set to expire at the end of June, allows an exception to production cuts for Iran, as well as Venezuela and Libya. A follow-up meeting with non-OPEC signatories will be held the next day.

 

The Libyan National Army (LNA) led by General Khalifa Haftar launched air strikes on Tripoli during the weekend as it continues its offensive against the capital of Libya that’s controlled by the UN-recognized Government of National Accord. At the moment, the LNA had sent a warship to one of the oil terminals, Ras Lanuf. All four export terminals are under the control of the LNA. For now, there have been no reports of falling oil production.

 

Australia has joined the growing list of U.S. crude oil importers with two tankers currently en route with cargoes of light U.S. crude. Lower freight rates have also helped more U.S. crude reach foreign markets, and as a result of this combination of favorable factors, total U.S. shipments of crude oil to Asia alone could reach 38.1 million barrels in May (this equals 1.2 million bpd). China stopped buying U.S. crude in September last year as the trade conflict between the two countries escalated, but earlier this month media reported that Sinopec was due to receive this week its first cargo of U.S. oil since September.

 

We don’t expect any firm trend in bunker prices evolution today.