MABUX: Bunker market this morning, July 30

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 July 29:

380 HSFO – USD/MT – 417.93 (+2.23)
180 HSFO – USD/MT – 453.14 (+1.59)
MGO – USD/MT – 656.27 (-0.80)

Meantime, world oil indexes turned into slight upward trend on Jul.29: prospects of the first U.S. interest rate cut in a decade supported oil indexes.
 
Brent for September settlement increased by $0.25 to $63.71 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for September delivery gained $0.67 to $56.87 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $6.84 to WTI. Gasoil for August added $2.75.

Today morning oil indexes continue slight upward evolution.

Iran described emergency talks on a multi-party nuclear agreement with a group of signatories as constructive but there are unresolved issues and Tehran will continue to reduce its nuclear commitments if Europeans fail to salvage the pact. The meeting did not include the United States, which pulled out of the agreement in May 2018 and slapped sanctions back on Iranian oil exports.

Tensions remain high around the Strait of Hormuz, the world's most important oil passageway, as Iran refused to release a British-flagged tanker it seized but granted India consular access to 18 Indian crew members. Denmark welcomed the British government's proposal for a European-led naval mission to ensure safe shipping through the strait. The United States is also working on a multinational maritime security initiative in the Gulf. The U.K. said on Jul.29 a second warship arrived in the area and South Korea may deploy its own unit as part of a multinational force. The strait is a vital thoroughfare for the energy industry, accounting for about a third of the world’s oil and a quarter of the gas transported by tanker.

Meanwhile, South Korea is considering sending its Cheonghae naval unit to the strait for participation in a U.S.-led coalition. South Korea’s 302-personnel Cheonghae unit includes the destroyer Dae Jo-yeong, an anti-submarine helicopter and three speed boats. It’s been stationed in the Gulf of Aden since 2009 for anti-piracy operations and has also been utilized in recent years to help evacuate South Korea citizens from Libya and Yemen.

Market is also focused this week on meetings of major central banks including the U.S. Federal Reserve, which is expected to lower interest rates. U.S. economic growth slowed less than expected in the second quarter with a boom in consumer spending, strengthening the outlook for oil consumption.

Russian oil production is expected to total 556-557 million tonnes this year, or 11.17-11.19 million barrels per day (bpd). That would be in line with Moscow’s commitments under a global deal between oil producers to cut output: Russia committed to cut output by 228,000 bpd from the 11.41 million bpd pumped in October 2018. Earlier this month, OPEC and non-OPEC nations, led by Saudi Arabia and Russia, agreed to extend the current oil production cut deal to until March 2020, seeking to prop up the price of crude as the global economy weakens and U.S. production soars.

We expect bunker prices may continue irregular changes today in a range of plus-minus 1-3 USD.