MABUX: Bunker market this morning, Dec 11

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 decreased on December 10:

380 HSFO - USD/MT – 351.71 (-0.19)
180 HSFO - USD/MT – 393.48 (-1.87)
MGO - USD/MT – 669.55 (-0.38)

Meantime, world oil indexes increased on Dec.10 as OPEC’s deal with associated producers last week to deepen output cuts in 2020 continued to provide a floor for prices, but U.S.-China trade tensions clouded the demand outlook.

Brent for February settlement increased by $0.09 to $63.34 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January rose by $0.22 to $58.43 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $5.10 to WTI. Gasoil for December delivery added $4.00.

Today morning oil indexes demonstrate slight down evolution after the American Petroleum Institute (API) reported that U.S. crude stockpiles rose last week.

Data released on Sunday showed exports from China unexpectedly fell 1.1% in November. The weak data came amid growing fears that there will be no trade deal between the U.S. and China to stop the latest round of U.S. tariffs against some $156 billion Chinese goods coming into force on Sunday.

Trade uncertainties were also said to be dragging oil prices down today. While the Wall Street Journal reported overnight that Washington might delay a planned tariff on Chinese goods that are set to kick in on Sunday, White House economic advisor Larry Kudlow cautioned that the tariffs are still “on the table.”

Meanwhile, White House adviser Peter Navarro also said he saw no indication that the tariff hike will be averted. So far, China and the U.S. have yet to reach a phase one trade deal. Reuters reported earlier this month that the signing of the deal might slide into next year.

Some said that, though overshadowed for now, the move by OPEC+ to deepen output cuts from 1.2 million barrels per day to 1.7 million bpd would continue to underpin oil prices. But rising non-OPEC production threatens to counteract efforts to limit global crude supplies. The non-OPEC output is expected to rise by well over 2 million bpd next year, with big increases in the U.S., Brazil, and Norway.

The API said crude inventories rose by 1.41 million for the week ended Dec. 6. It was expected, that the Energy Information Administration will report a draw of 2.8 million barrels when it issues numbers tomorrow morning. The EIA numbers are due at 10:30 AM ET (15:30 GMT).

The number of tankers floating around the Singapore Strait has seen a steady decline in recent weeks as low sulfur material gets moved to landed storage to meet rising demand for IMO 2020-compliant marine fuel. Several vessels that had been storing low sulfur fuel for weeks around Singapore have moved out in recent weeks after offloading their cargoes. While the move indicates onshore logistics are increasingly getting ready for the fuel switch, the drawdown in inventories — which took several months to build — also highlights the challenges the industry is likely to face in ensuring sufficient supply.

We expect bunker prices will increase today: about 1-3 USD up.