MABUX: Bunker market this morning, May 10
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) changed insignificant and irregular on May 09:
380 HSFO - USD/MT - 414.50 (-0.07)
180 HSFO - USD/MT - 461.64 (-0.29)
MGO - USD/MT - 656.00 (+0.64)
Meantime, world oil indexes also changed irregular on May 09: an escalating trade battle between the United States and China counteracted upward pressure from a surprise decline in U.S. crude inventories.
Brent for July settlement increased by $0.02 to $70.39 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for June delivery declined by $0.42 to $61.70 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 8.69 to WTI. Gasoil for May delivery lost $7.00.
Today morning oil indexes turned into slight upward trend.
U.S. crude inventories fell 4 million barrels last week, compared with analysts’ forecast of a 1.2 million-barrel build.
The Sino-U.S. trade war has weighed on fuel prices this week as heightened tensions between the world’s two biggest economies cloud the global economic outlook. U.S. President Donald Trump said on May 08 that China broke the deal in trade talks with Washington and would face stiff tariffs if no agreement is reached. Higher tariffs are set to take effect on May 10, during Chinese Vice Premier Liu He’s two-day visit to Washington from May 09.
China imported around 800,000 bpd of crude from Iran in April—the highest amount that Iran’s top oil customer purchased since August last year—as Chinese refiners rushed to buy Iranian oil ahead of the expiry of the U.S. sanction waiver at the beginning of May. Iran’s oil customers were only guessing if the United States would extend the waivers that expired last week, so all Iranian clients, including its biggest customer China, rushed in to procure cheap Iranian oil in March and April. Total Chinese crude oil imports rose by 11 percent year on year in April 2019, to reach 10.64 million bpd.
The confrontation between the United States and Iran continued over the Iranian nuclear deal and Iranian oil exports as the United States stands firm on its position that it will succeed in reducing Iranian oil exports to zero. The strong words from the United States came after Iran announced it would no longer be curbing its nuclear program, threatening to go even further, saying it would resume enriching uranium at a higher level if the EU fails to live up to its end of the agreement by continuing Iranian oil purchases. The EU struggles to not run afoul of US sanctions against a major oil supplier. Reaffirming its commitment to the sanctions, the United States said it would quickly respond to any sanctions violation by the EU. As a final result, the United States had announced that it was deploying the USS Abraham Lincoln Carrier Strike Group and a bomber task force to the U.S. Central Command region. New round of tension is supporting fuel indexes.
Saudi Arabia has received several moderate requests to replace Iranian oil next month. At the moment Saudi Arabia’s Arab Light for June delivery sells at a premium of US$2.10 per barrel to the Oman/Dubai average, up by US$0.70 per barrel from cargoes for May delivery. Riyadh also raised the price of this most popular among its grades for Europe, by US$0.80 a barrel from the price of shipments for May delivery. The price for oil exports to the United States, however, was reduced.
Libya’s UN-backed internationally recognized government has suspended the Libyan operations of as many as 40 foreign companies, including those of France’s oil and gas supermajor Total. According to the Tripoli-based government of national accord (GNA), the licenses of those 40 foreign firms had expired. The security situation in Libya has worsened recently as General Khalifa Haftar ordered last month his Libyan National Army (LNA) to march on the capital Tripoli. A renewed confrontation could escalate and threaten to disrupt, Libya’s oil production and exports. The news supported fuel indexes.
There were calls for a US Naval blockade to stop Venezuelan oil from getting to its closest ally, Cuba. Venezuela’s oil flows to Cuba have so far continued largely unabated despite the sanctions. Venezuela is Cuba’s largest oil supplier, and at a high point, the oil trade from Venezuela to Cuba reached 100,000 bpd. Maduro’s opponent, Juan Guaido, has long asserted that oil shipments to Cuba must stop as Venezuela is in crisis with repeated blackouts that have plunged the country into darkness.
We expect bunker prices will not have any firm trend today and may change irregular in a range of plus-minus 2-5 USD.
