MABUX: Bunker market this morning, July 23

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) demonstrated slight upward trend on July 22:

380 HSFO – USD/MT – 423.76 (+2.56)
180 HSFO – USD/MT – 461.06 (+3.10)
MGO – USD/MT – 658.05 (+4.36)

Meantime, world oil indexes rose on Jul.22 as tensions mounted between the U.K. and Iran, increased fears of a disruption to oil supplies coming out of the Persian Gulf.

Brent for September settlement increased by $0.79 to $63.26 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for September delivery rose by $0.46 to $56.22 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $7.04 to WTI. Gasoil for July gained $8.75.

Today morning oil indexes continue to rise.

U.S. sanctions on Venezuela and Iran have removed more than 1.5 million barrels of daily supply from the market, OPEC extended a supply-cut deal into 2020 and tensions between the United States and Iran are rising.

It was reported that Iran seized a British-flagged oil tanker in the Strait of Hormuz, adding to tensions in the area. It was not clear why the Iranians had seized the tanker, but state-run media said it was for violations of international regulations. The rising tensions in the Strait of Hormuz, where the United States and others are moving to protect tankers against Iran, supported oil indexes. On July,22 Iran said it had captured spies working for U.S. intelligence, a report U.S. officials denied. That comes just after news that Iran had seized a British tanker.

Geopolitical tensions in the Middle East intensified after Iran shot down a U.S. surveillance drone in June. Earlier this month, U.S. President Donald Trump claimed to have brought down an Iranian drone.

The steady rise in U.S. oil output and demand worries from a protracted Sino-U.S. trade war, however, have weighed on demand forecasts. Trump said last week a trade deal with China might not happen right away and that he is considering heavier tariffs against Beijing.
The International Energy Agency recently cut its expectation for global demand through 2019 and 2020 and said it may cut it again if the global economy - and especially China -show further weakness. At the same time Saudi Arabian exports fell to a 1-1/2-year low in May.

U.K. Prime Minister Theresa May held an emergency meeting on July,22 to discuss with British ministers the situation. It wasn't immediately clear what had been agreed. The U.S. has accused Iran of being behind two other tanker attacks in the region since May and threatened on Friday to down any Iranian drones that fly too close to its ships.

Washington and Tehran have been at odds since U.S. President Donald Trump decided to withdraw from a nuclear accord with Iran and reinstate economic sanctions.

Libya’s National Oil Corporation lifted a declaration of force majeure on loadings at the port of Zawiya from the Sharara field, the country's largest. That had been in place since late Friday, shutting in production of 290,000 barrels a day. The field resumed half that output earlier on July,22.

We expect bunker prices may rise today: 3-5 USD up for IFO, 6-8 USD up for MGO.