MABUX: Bunker market this morning, Feb 27

The Bunker Review was contributed by Marine Bunker Exchange (MABUX)

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO (Gasoil) in the main world hubs continued downward changes on Feb. 26:

380 HSFO: USD/MT 354.63 (-1.88)
VLSFO: USD/MT 508.00 (-9.00)
MGO: USD/MT 571.12 (-6.86)

Meantime, world oil indexes also declined on Feb.26 as the spread of the coronavirus outside China sparked a new wave of fears and oil demand concern.

Brent for April settlement decreased by $1.52 to $53.43 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for April fell by $1.17 to $48.73 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $4.70 to WTI. Gasoil for March delivery declined by $17.00.

Today morning oil indexes continue to fall.

Asia reported hundreds of new coronavirus cases on Wednesday, including the first U.S. soldier to be infected and outbreaks in Italy and Iran spread to other countries. The U.S. Centers for Disease Control and Prevention (CDC) warned Americans on Tuesday to prepare for a likely pandemic. The COVID-19 continue to spread across the world. Brazil reported its first coronavirus case on Wednesday, the first in Latin America, while Germany said it had seven new cases, continuing the rash of infections seen outside of China that have run from Iran to South Korea

Oil prices have a little support from hopes for deeper output cuts by OPEC and its allies including Russia, a group known as OPEC+. They due to respond to the oil market impact of the coronavirus with possible additional production cuts, and next week’s meeting will decide the future of the coalition’s current 1.7 million b/d supply cut accord, which expires at the end of March. OPEC+ is weighing a recommendation to cut its quotas by another 600,000 b/d, but Russia, the key non-OPEC partner, has yet to commit.  Secretary General Mohammed Barkindo said OPEC is monitoring the spread of the COVID-19 virus ahead of its scheduled March 5-6 meeting as a suspected case of the infection was reported in Vienna near the secretariat. As of now, plans for the meeting have not been changed.

Kuwait has barred foreign ships, except those carrying oil, from departing to or arriving from several countries to prevent the spread of the coronavirus. The notice, dated Feb. 25, has banned ships from and to South Korea, Italy, Thailand, Singapore, Japan, China, Hong Kong and Iraq. Oil sector ships are excluded from the ban.

The International Energy Agency's (IEA) outlook for global oil demand growth has fallen to its lowest level in a decade, Executive Director Fatih Birol said on Tuesday, adding it could be reduced further due to the outbreak.

According to the Energy Information Administration, U.S. crude oil stockpiles rose less, than expected last week - by 452,000 barrels. That compared with expectations for a build of 2 million barrels. Gasoline inventories dropped by 2.7 million barrels, versus forecasts for a decline of about 2.25 million barrels. Distillate stockpiles fell by 2.1 million barrels, compared with expectations for a drawdown of 1.71 million barrels.

We expect bunker prices may continue downward trend today: 5-7 USD down for IFO, 15-17 USD down for MGO.