MABUX: Bunker market this morning, Dec 18

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 upward changes on December 17:

380 HSFO: USD/MT – 365.37 (+4.31)
180 HSFO: USD/MT – 406.70 (+4.20)
MGO: USD/MT – 684.60 (+5.33)

Meantime, world oil indexes also increased on Dec.17 on optimism the partial U.S.-China trade pact will bolster demand.

Brent for February settlement increased by $0.76 to $66.10 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January rose by $0.73 to $60.94 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $5.16 to WTI. Gasoil for January delivery added $6.75.

Today morning oil indexes slide down after the American Petroleum Institute (API) reported a large build of weekly crude inventories.

According to American Petroleum Institute (API), oil inventories rose by 4.7 million barrels last week. It was forecasted to show a drawdown of 1.3 million barrels. The U.S. Energy Information Administration(EIA) reports its weekly numbers today in the evening. At the same time, the EIA said on Dec.16 that it expected American shale production to rise by 30,000 barrels a day to around 9.14 million in January.

Sino-U.S. trade optimism were said to be limiting losses of oil prices today. A phase one trade deal was agreed between the U.S. and China last week, easing some concerns over the economic impact of a prolonged dispute between the world’s two biggest oil importers. Under the agreement, Washington suspended planned tariffs on Chinese goods in exchange for Beijing purchases of agricultural, manufactured and energy products increasing by about $200 billion over the next two years.  However, there is some skepticism over how much products Beijing will actually purchase. It is also unclear when the next phase of negotiations will begin.

Some said the wording of the agreement, which will be officially signed in January, “remained a delicate issue.” Both sides want to make sure expressions used in text did not re-escalate tensions and deepen differences, according to the report.

Also supporting prices, the Organization of the Petroleum of Exporting Countries (OPEC) and allies like Russia – a grouping known as OPEC+ – are making a further oil supply cut of 500,000 barrels per day from Jan. 1 to support the market.
This comes on top of the existing deal to trim supply by 1.2 million bpd that came into effect on Jan. 1 this year.

U.S. economic numbers are also support the indexes. The data from the Federal Reserve showed manufacturing output rose more than expected in November, as the end of a strike at General Motors plants boosted auto production. U.S. housing starts also rose more than expected last month, figures showed.

We expect bunker prices to rise today: 3-5 USD up for IFO, 5-7 USD up for MGO