MABUX: Bunker Market this morning, Oct 18
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) demonstrated slight irregular changes on Oct.17
380 HSFO - USD/MT 364.79 (-3.28)
180 HSFO - USD/MT 407.70 (-1.86)
MGO - USD/MT 661.52 (+1.59)
Meantime, world oil indexes also demonstrated irregular changes on Oct.17
Brent for December settlement increased by $0.49 to $59.91 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for November delivery rose by $0.57 to $53.93 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $5.98 to WTI. Gasoil for November delivery declined by $3.75.
Today indexes dip after China, the world's largest oil importer, recorded its weakest quarter of economic growth in nearly three decades, dragged down by a trade dispute with the United States.
In the third quarter, China's economic growth slowed to 6% year-on-year, its weakest pace in 27-1/2 years and below expectations, dogged by soft factory production amid ongoing trade tensions with United States and sluggish domestic demand. Crude demand growth tends to closely follow economic growth. Refinery throughput in September rose 9.4% from a year earlier to 56.49 million tonnes, on increases from new refineries and as some independent refiners resumed operations after maintenance.
Jump in weekly U.S. crude inventories also pressured the oil prices. According to the Energy Information Administration U.S. oil inventories soared for the latest week, rising much more than the market expected. Crude stockpiles jumped 9.3 million barrels last week compared to expectations for a rise of about 2.9 million barrels. But Gasoline inventories fell by 2.56 million barrels, versus expectations for a drawdown of about 1.21 million barrels. Distillate inventories fell by 3.8 million barrels, with prediction a decline of about 2.4 million barrels.
The decline in fuel stockpiles came after refinery runs fell to just over 83% last week, one of the lowest in years after the peak summer driving season. Refiners typically wind down operations during the fall season to do plant repairs or upgrades. This year, many refineries are taking longer to return to ensure compatibility with new maritime fuel rules, dubbed IMO, taking effect in 2020. The buildup in U.S. stockpiles comes amid broader concerns of slowing global demand, as U.S.-China trade tensions continue to take a toll on the world-wide economy. At the same time this can pressure an OPEC+ members to trigger deeper supply cuts,
At the same time easing of geopolitical tensions in the Middle East supported oil prices. Turkey has agreed to a five-day ceasefire in northeast Syria to allow for withdrawal of Kurdish forces, U.S. Vice President Mike Pence said after talks with Turkish President Tayyip Erdogan on Thursday.
Earlier news that U.K. and European Union leaders announced a tentative Brexit deal was supportive for oil prices, though the pact must be approved by the British parliament and other EU member states. U.K. Prime Minister Boris Johnson faces a tough task in winning approval.
We expect bunker prices to demonstrate slight irregular changes today: 1-3 USD up for IFO, 2-4 USD down for MGO.