MABUX: Bunker market this morning, Mar 13
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 declined on March 12:
380 HSFO: USD/MT 291.14 (-6.11)
VLSFO: USD/MT 392.00 (-10.00)
MGO: USD/MT 478.90 (-7.17)
Meantime, world oil indexes fell on Mar. 12 after President Donald Trump restricted travel to the United States from Europe as part of measures to try to halt the spread of coronavirus. The World Health Organization described the outbreak as a pandemic.
Brent for May settlement decreased by $2.57 to $33.22 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for April fell by $1.48 to $31.50 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $1.72 to WTI. Gasoil for April delivery decreased by $38.75.
Today morning oil indexes slightly rise due to the correction.
President Donald Trump banned most Europeans from coming into the United States to prevent the Covid-19 spread. Trump’s decision to stop travelling from 26 European pushed the prices down.
A flood of cheap supply coming onto the market from Saudi Arabia and the United Arab Emirates compounded pressure on prices. The Gulf Arab producers are raising production as they go on the offensive in an oil price war with Russia. Saudi Arabia has already stepped up efforts to squeeze Russia's Urals oil grade out of its main markets by offering its own cheap barrels to refiners worldwide that buy Russian crude.
As top oil exporter Saudi Arabia moved quickly to boost output, Russia stuck by the decision that led last week to the collapse of its alliance with Riyadh and other producers. Moscow said that there was no point cutting output because it would likely be too little to compensate for the virus' impact on global demand.
The International Energy Agency this week decreased its annual forecast for global oil demand by almost 1 million barrels per day, or 1%. Demand in the first quarter has fallen sharply on the year, mostly because of the impact of the virus on economic activity in China.
With demand falling sharply and output rising quickly, the market is facing a big surplus in April. Estimates for the scope of the glut vary up to 6 million bpd.
The March 18 meeting of the OPEC+ panel monitoring the oil market and producers’ compliance with quotas has been canceled as Saudi Arabia and its OPEC allies face off with Russia in an escalating oil price war after the OPEC+ group failed to agree on joint actions on March, 6. Earlier on March 11, reports suggested that the meeting would go ahead, but in a teleconference format because of the coronavirus outbreak which is spreading in Europe. Russia’s energy ministry believes that under the circumstances a teleconference is the most adequate format for holding the meeting, but didn’t confirm the date of March 18, saying that “we need to ascertain if we have received an official invitation.”
We expect bunker prices to decrease today: 10-15 USD down for IFO, 25-30 USD down for MGO.