MABUX: Bunker market this morning, Nov 19

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 upward changes on November 18:

380 HSFO - USD/MT – 340.45 (+6.16)
180 HSFO - USD/MT – 384.62 (+5.10)
MGO - USD/MT – 668.56 (+5.49)

Meantime, world oil indexes also declined on Nov.18 after China’s concerns over the impeachment proceedings of President Trump.

Brent for January settlement decreased by $0.86 to $62.44 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for December delivery fell by $0.67 to $57.05 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $5.39 to WTI. Gasoil for December delivery fell by $15.50.

Today morning oil indexes fell amid market jitters over limited progress between China and the United States on rolling back trade tariffs.

Indexes were under the pressure after China said that Beijing was minded not to make any further concessions in talks in the near term, and that they preferred to wait and see how the impeachment proceedings against President Donald Trump play out. At the same time, Beijing is not optimistic about prospects for a trade deal as Chinese officials are troubled by U.S. President Donald Trump's comment that there was no agreement on phasing out tariffs. That would reduce the effect of the phase one trade deal that both sides have publicly talked up, but repeatedly pushed back due to reported differences over issues ranging from tariffs to intellectual property rights.

Looking ahead, the market is also paying close attention to the upcoming Dec. 5-6 OPEC+ meeting. OPEC+ agreed in December 2018 to cut supply by 1.2 million barrels per day. As that agreement comes up for review in the next three weeks, members of the cartel have already been sounding out that it might not want to deepen cuts.

Anti-government protests in Iraq continued on Monday, with protesters blocking roads leading to five oil fields in the southern Iraqi province of Basra, which is home to the biggest oil fields and the key oil export terminal in OPEC’s second-largest producer. Since the beginning of the protests in Iraq in early October, more than 320 people have died. Protests have quickly spread from Baghdad to the southern city of Basra, where people are angry that the massive oil revenues the government is raking in don’t go towards improving basic services such as water and electricity. Protesters are also angry with endemic corruption and want the leaders to resign. Further escalation of the anti-government protests and potential blockades of oilfields and oil export terminals could disrupt oil supply from the country.  At the same time, Iraq’s Oil Minister Thamer Ghadhban said in a statement a week ago, that Iraqi oil production and exports remain at stable levels.
 
According to a report from the Energy Information Administration (EIA) released on Nov.18 crude oil production from seven major U.S. shale plays is forecast to climb by average 49,000 barrels a day in December to 9.133 million barrels a day. Oil output from the Permian Basin, which covers parts of western Texas and south-eastern New Mexico, is expected to see the biggest increase, up 57,000 barrels a day in December from November.

The market is also awaits weekly crude inventories reports from the U.S. Energy Information Administration and the American Petroleum Institute this week, which are due on Wednesday and Thursday respectively.

We expect bunker prices may demonstrate downward changes today: 3-5 USD down for IFO, 10-15 USD down for MGO.