MABUX: Bunker market this morning, Nov 22
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) slightly increased on November 21:
380 HSFO: USD/MT – 336.32 (+3.59)
180 HSFO: USD/MT – 379.37 (+2.24)
MGO: USD/MT – 659.11 (+2.84)
Meantime, world oil indexes rose on Nov.21 following the reports that OPEC and its allies are likely to extend output cuts until mid-2020.
Brent for January settlement increased by $1.57 to $63.97 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January delivery rose by $1.47 to $58.58 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $5.39 to WTI. Gasoil for December delivery gained $5.25.
Today morning oil indexes change irregular so far.
The trade war between the U.S. and China - world's two biggest economies - has hit global growth prospects and dominated the outlook for future oil demand. There are concerns that the first phase of a trade deal could slide into next year, while markets are wary negotiations might take a hit as the U.S. House of Representatives passed two bills to back protesters in Hong Kong, much to the disapproval of China. U.S. President Donald Trump said he is inclined to raise tariffs on Chinese imports if a trade deal is not reached.
Russian President Vladimir Putin said on Nov.20 Russia and OPEC have 'a common goal' of keeping the oil market balanced and predictable, and Moscow will continue cooperation under the global supply curbs deal. At the same time, Moscow argues that it will find it hard to cut oil production voluntarily during the cold winter months, especially in western Siberia, where Russia produces two-thirds of its oil and where most of its well rigs are located. The Organization of the Petroleum Exporting Countries (OPEC) meets on Dec. 5 in Vienna, followed by talks with a group of other exporters, including Russia, known as OPEC+.
Meantime, some sources said, that OPEC and its allies are likely to extend existing oil output cuts when they meet next month until mid-2020. The current oil supply cuts run through to March 2020. On Dec. 5, Saudi Arabia is set to announce the final pricing of the initial public offering of Aramco, in what it hopes will be the world's largest IPO. The oil price at the time is likely to be key to Aramco's listing, expected around mid-December. OPEC sources in turn said market conditions in the first quarter of 2020 remain unclear amid concerns of a slowdown in oil demand and weak output compliance by some producers such as Iraq and Nigeria, which is complicating the outlook.
Iranian President Hassan Rouhani said on Nov.20 that Iran and its people have defeated the conspiracies of its enemies and claimed victory in the nationwide protests in the country following a massive fuel price hike last week. Last week Iran raised by 50 percent gasoline prices—which are some of the cheapest in the world—and introduced limits on gasoline purchases to help needy households as U.S. sanctions cripple the economy. The fuel price hike sparked protests across the country that have already claimed at least one victim.
Just a few weeks away from implementation, the International Maritime Organization’s (IMO) 2020 sulphur cap continues to create waves throughout the marine industry. The headlines it has generated have primarily focussed on the need for – and availability of – 0.50% sulphur fuels, the main compliance choice. But this is only one of the critical factors: compliance will need to go hand in hand with quality. In this context it should include stability, compatibility, combustion characteristics, a fuel’s susceptibility to waxing and the presence of catalytic fines. Bunkering a poor quality fuel could have serious operational ramifications and implications on the total costs of operations, even if it complies with IMO 2020.
Meanwhile, global oil refiners have upgraded processing units and adjusted operations to raise output of low-sulphur residual fuels and marine gasoil (MGO) to prepare for stricter shipping fuel standards that kick in on Jan. 1, 2020. The shipping industry consumes about 4 million barrels per day (bpd) of marine bunker fuels, and the rule changes will impact more than 50,000 merchant ships globally, opening a significant new market for fuel producers.
We expect bunker prices may demonstrate upward trend today in a range of plus 6-12 USD.
