MABUX: Bunker Market this morning, Sep 03

The Bunker Review was contributed by Marine Bunker Exchange (MABUX)

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) declined on Sep. 02

380 HSFO - USD/MT 364.44 (-5.98)
180 HSFO - USD/MT 405.85 (-6.20)
MGO - USD/MT 644.10 (-1.23)

Meantime, world oil indexes also demonstrated downward changes on Sept. 02.

Brent for November settlement decreased by $0.59 to $58.66 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for October delivery declined by $0.26 to $54.84 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 2.82 to WTI. Gasoil for September delivery fell by $5.50.

Today indexes are steady because of China-US tensions and a rise in OPEC output.

The latest tariffs officially came into effect on Sep.01, with the US placing 15 per cent tariffs on over 3,000 Chinese products worth $110 billion. In turn China announced their own new batch of tariffs, which also came into effect on Sep.1 on $75 billion worth of American goods, including US crude oil. Further tariffs are also set to kick in December by both countries unless a trade agreement is agreed on before then.

Output from OPEC rose in August for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by top Saudi Arabia and losses caused by U.S. sanctions on Iran. OPEC, Russia and other non-members, known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from Jan. 1 this year. OPEC's share of the cut is 800,000 bpd, to be delivered by 11 members and exempting Iran, Libya and Venezuela.

An Iranian oil tanker pursued by the U.S. across the Mediterranean Sea slowed to a near-stop Sunday off the coast of Syria, where America’s top diplomat alleges it will be unloaded despite denials from Tehran. Tehran sent a deputy foreign minister and a team of economists to Paris on Monday for talks over ways to salvage the accord after a call between Iranian President Hassan Rouhani and French President Emmanuel Macron. The U.S. has been warning countries not to accept the Adrian Darya, which carries 2.1 million barrels of crude oil worth some $130 million. The U.S. has sanctioned the Adrian Darya’s captain and has sought to impound the vessel. Authorities in Gibraltar alleged the ship was bound for a refinery in Baniyas, Syria, when they seized it in early July. They ultimately let it go. Iranian officials have said the oil onboard the Adrian Darya had been sold to an unnamed buyer. However, anyone buying Iranian crude oil would be subject to U.S. sanctions.

While U.S. sanctions on Iran's oil industry have slashed the OPEC member's crude exports by more than 80%, oil product sales from the Islamic Republic remain strong at nearly $500 million a month. Sanctions have barely affected Iran's exports of oil products, primarily fuel oil used for power generation and shipping as well as liquefied petroleum gas (LPG) used as cooking gas and petrochemical feed. Iran's product exports reached their highest level in August.

Hurricane Dorian came ashore in the Bahamas tied as the most powerful storm to hit land anywhere in the Atlantic. Oil indexes ware driven by the prospect of Dorian reducing gasoline demand in Florida, Georgia and South Carolina, Jeffrey Halley. WTI could quickly recoup those losses if Dorian looks like it will miss the Florida panhandle and the Carolinas.

Data due this week on U.S. inventory levels will be delayed by a day to Wednesday and Thursday amid the U.S. Labor Day holiday on Sept.02.

We expect bunker prices to demonstrate downward changes today: about 5-8 USD down for IFO, about 3-5 USD down for MGO.