MABUX: Bunker Market this morning Sep 05

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) demonstrated irregular changes on Sep. 04

380 HSFO - USD/MT 355.17 (+1.09)
180 HSFO - USD/MT 397.98 (+1.819)
MGO - USD/MT 639.52 (-0.72)

Meantime, world oil indexes demonstrated sharp upward changes on Sept. 04. on positive news from China's services sector

Brent for November settlement increased by $2.44 to $60.70 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for October delivery rose by $2.32 to $56.26 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 4.44 to WTI. Gasoil for September delivery increased by $23.00.

Today indexes continue to rise after the U.S. confirmed that talks with China to reach a trade agreement would be held in the coming weeks

U.S. Trade Representative (USTR) Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu He and agreed to hold ministerial-level trade talks in Washington in the coming weeks. Shortly after in Beijing, China's commerce ministry said the talks would be held and both sides agreed that they should work together and take practical actions to create good conditions for consultations. As the trade war between the United States and China has rumbled on into a second year, evidence has been mounting that economies worldwide are being hit, prompting downgrades of oil demand growth expectations.

The activity in China's services sector expanded at the fastest pace in three months in August as new orders rose, prompting the biggest increase in hiring in over a year. China is the world's second-largest oil consumer and largest importer. However U.S. President Donald Trump on Sept.03 warned he would be "tougher" on Beijing in a second term if trade talks dragged on. That means that trade disputes between the United States and China could trigger a U.S. recession.

At the same time U.S. data released on Sept.04 showed manufacturing activity contracted in August for the first time in three years, while euro zone activity declined for a seventh month
Citi cut its Brent forecasts for the third and fourth quarters by about $10 a barrel to $62 and $64 respectively, and expects the benchmark to fall to $53 by the end of 2020.

According to API, crude inventories in the United States rose by 401,000 barrels in the week ended Aug. 30 to 429.1 million, compared with analysts' expectations for a decrease of 2.5 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 238,000 barrels, while refinery crude runs fell by 306,000 barrels per day.

OPEC’s oil exports rose to a four-month high, tanker tracking data compiled by Bloomberg showed on Sept.3. OPEC’s largest producers Iran, Iraq, Kuwait, Saudi Arabia, and the United Arab Emirates (account for three-quarters of the cartel’s total production) shipped 15.73 million barrels of crude oil per day on average in August — an increase of 736,000 barrels per day over July levels, marking a four-month high, even as the group tries to live up to its promise to balance the oil market.

OPEC’s total August production was estimated at 29.61 million barrels per day, according to a Reuters survey, with Saudi Arabia, Nigeria, and Iraq all increasing their production. Bloomberg on Monday estimated that the group’s production had risen 200,000 bpd for the month, to 29.99 million barrels daily. According to the Bloomberg data, Saudi Arabia’s production increased by 50,000 bpd in August, to 9.83 million bpd.

We expect bunker prices to demonstrate upward changes today: about 8-10 USD up for IFO, about 15-20 USD up for MGO.