MABUX: Bunker Market this morning, Nov 01

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) decreased on Oct.31

380 HSFO - USD/MT 356.25 (-0.69)
180 HSFO - USD/MT 307.88 (-1.19)
MGO - USD/MT 665.83 (-1.90)

Meantime, world oil indexes also demonstrated downward evolution on Oct.31

Brent for January settlement decreased by $0.38 to $60.23 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for December delivery fell by $0.88 to $54.18 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $6.05 to WTI. Gasoil for November delivery declined by $15.00.

Today indexes rise rebounding from a U.S. inventory build and fresh uncertainty on Sino-U.S. trade developments that sent oil markets down in the previously session.

Also weighing on oil prices was the information about Chinese officials were casting doubts about reaching a comprehensive long-term trade deal with the U.S. They remain concerned about President Donald Trump’s impulsive nature and the risk he may back out of even the limited deal both sides say they want to sign in the coming weeks. Trump said in a tweet overnight that Beijing and Washington are searching for a new venue for the signing of a phase one trade deal.

The rise of U.S. crude stockpiles also pressures the prices. The EIA reported on Oct.30 that U.S. crude stockpiles rose by 5.7 million barrels for the week ended Oct. 25. The market was looking for a rise of about 494,000 barrels.

U.S. crude production soared nearly 600,000 barrels per day in August to record of 12.4 million, buoyed by a 30% increase in Gulf of Mexico output. The U.S. has become the world’s largest oil producer with output surging to records above 12 million bpd this year as technological advances have increased production from shale formations across Texas, North Dakota and New Mexico. All three states saw output rise in August.

At the same time, OPEC oil output has bounced in October from an eight-year low as a rapid recovery in Saudi Arabian production from attacks on oil plants more than offset losses in Ecuador and voluntary curbs under a supply pact. OPEC has pumped 29.59 million barrels per day (bpd) this month, up 690,000 from September's revised figure which was the lowest monthly total since 2011. Initially expected to take months, Saudi Arabia's production recovery from the Sept. 14 attacks took only weeks.

Saudi Arabia has pumped 9.90 million bpd, up 850,000 bpd from September. Before last month's attack, Saudi Arabia was already restraining output by more than called for by the OPEC-led supply deal to support the market. The country is still pumping more than 400,000 bpd less than the agreement allows it to.

We expect bunker prices to demonstrate downward changes today: 1-3 USD down for IFO, 10-15 USD down for MGO.