MABUX: Bunker market this morning, Sept 16
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) demonstrated upward changes on September 17:
380 HSFO USD/MT294.26 (+2.50)
VLSFO USD/MT 340.00 (+4.00)
MGO USD/MT 411.29 (+3.77)
Meantime, world oil indexes also increased on Sep.17 as OPEC and its allies said the producer group would crack down on countries that failed to comply with output cuts and planned to hold an extraordinary meeting in October if oil markets weaken further.
Brent for November settlement increased by $1.08 to $43.30 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for October rose by $0.81 to $40.97 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.33 to WTI. Gasoil for October delivery added $14.75.
Today morning oil indexes continue to rise.
Supporting prices, OPEC and its allies said on Sep.17 the group will take action on members that are not complying with deep output cuts to support the market following a coronavirus-led slump in fuel demand. The panel of major producers, including Saudi Arabia and Russia, did not recommend any changes to their current output reduction target of 7.7 million barrels per day (bpd), or around 8% of global demand.
The panel pressed laggards such as Iraq, Nigeria and the United Arab Emirates to cut more barrels to compensate for overproduction in May-July, while extending the compensation period from September to the end of December. Saudi Arabia also warned speculators not to bet against OPEC.
Prices are under pressure from the slow economic recovery from the pandemic. Global coronavirus cases were over 30 million on Thursday. An OPEC+ technical panel warned that a rise in coronavirus cases in some countries may curb oil demand despite signs of economic recovery and initial indications of a decline in oil stocks. At the same time, Russian Energy Minister Alexander Novak expects global oil demand to recover fully in the second quarter of 2021.
U.S. offshore drillers and exporters began a clear up on Thursday after Hurricane Sally weakened to a depression and started rebooting idle Gulf of Mexico rigs after closing the down for five days. Crews were flown back to at least 30 offshore oil and gas platforms.
Saudi Arabia's crude oil exports rebounded in July to 5.73 million barrels per day (bpd) from a record low in June. At 4.98 million bpd, crude exports in June were the weakest on record, according to data from the Joint Organizations Data Initiative (JODI) stretching back to 2002. Saudi Arabia's crude production rose 13.3% month-on-month in July to 8.48 million bpd, its lowest since December 2002. Output from OPEC rose by more than 1 million bpd in July as Saudi Arabia and other Gulf members ended voluntary supply cuts, on top of an OPEC-led deal to curb production.
The U.S. Labor Department's report showed the number of Americans filing new claims for unemployment benefits fell last week, but remained at extremely high levels as the labor market recovery shifts into low gear and consumer spending cools.
We expect bunker prices may demonstrate upward changes today: 5-7 USD up for IFO and 11-14 USD up for MGO.