MABUX: Bunker market this morning, Nov 13

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) continued downward evolution on Nov 12:

380 HSFO - USD/MT - 345.08 (-4.11)
180 HSFO - USD/MT – 387.39 (-3.40)
MGO - USD/MT – 662.90 (-0.71)

Meantime, world oil indexes also declined on Nov.12 after President Trump disappointed the market again over “phase one” of the U.S.-China deal.

Brent for January settlement decreased by $0.12 to $62.06 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for December delivery fell by $0.06 to $56.80 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $5.26 to WTI. Gasoil for November delivery lost $8.50.

Today morning oil indexes continue slight downward evolution as prospects for a trade deal between the United States and China dimmed, weighing on the outlook for the global economy and energy demand.

U.S president Donald Trump said the United States is close to signing a "phase one" trade deal with China, adding in a speech to the Economic Club of New York he will only accept a deal if it is good for his country and U.S. workers. For weeks Trump has said the countries are close to a deal that would end their damaging trade war. He has also said the signing could take place in a rural part of the United States. He also said there had been incorrect reporting about U.S. willingness to lift tariffs.

Oil indexes were also pressured by expectations that U.S. crude inventories rose again last week, climbing by 1.6 million barrels after the previous week’s jump of nearly 8 million barrels.

At the same time oil prices were underpinned by U.S. data showed that crude inventories at Cushing, the delivery point for WTI, fell by about 1.2 million barrels in the week to Nov. 8, traders said. Cushing inventories had grown for five weeks in a row through Nov. 1, according to government data.

However, crude stockpiles nationwide were forecast to have risen last week for a third week in a row, a preliminary poll ahead of government data due on Thursday showed. Weekly energy data has been delayed a day due to the Veterans Holiday on Monday.

A forecast by the International Energy Agency's for slower global oil demand growth post-2025 also weighed on the market. Global oil demand growth is expected to grow by 1 million barrels per day on average to 2025 but is forecast to slow to an average of 100,000 bpd a year from then on as fuel efficiency improves and more electric vehicles hit the road, the IEA said in its annual World Energy Outlook for the period to 2040.

Even as production growth in the United States slows from breakneck pace of recent years, the world's top oil producer will still account for 85% of the increase in global oil production to 2030, and for 30% of the increase in gas. The higher U.S. output pushes down the share of OPEC members and Russia in total oil production, which is expected to fall to 47% in 2030 from 55% in the mid-2000s.

Brent has risen 16% in 2019, supported by a supply-limiting pact by the Organization of the Petroleum Exporting Countries and allies including Russia. The producers meet on Dec. 5-6 to decide whether to extend the deal. Oman, one of the outside producers working with OPEC, said on Nov.11 that the alliance would probably extend the agreement but was unlikely to increase the size of the supply cut.
We expect bunker prices may demonstrate downward changes today: 1-3 USD down for IFO, 6-8 USD down for MGO.