MABUX: Bunker market this morning, Oct 01

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 downward changes on September 30:

380 HSFO: USD/MT 289.07 (-3.69)
VLSFO: USD/MT 342.00 (-4.00)
MGO: USD/MT 405.86 (-4.21)

Meantime, world oil indexes demonstrated irregular changes on September 30.

Brent for November settlement decreased by $0.08 to $40.95 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for November increased by $0.93 to $40.22 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $0.73 to WTI. Gasoil for October delivery added $4.00.

Brent closed last night Wednesday unchanged meanwhile the U.S. crude price rose on hopes that a U.S. economic stimulus deal would support the market, even as concerns about the coronavirus pandemic continued to loom over demand forecasts.

U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin both expressed hope for a breakthrough on coronavirus relief, as the House stood poised to vote on a new $2.2 trillion Democratic coronavirus bill. With pressure mounting ahead of the Nov. 3 election, Mnuchin said he thought he and Pelosi could “reach a reasonable compromise” and would know in the next day or two whether they had an “overall understanding.”

“The race is on to a stimulus bill,” said Bob Yawger, director of energy futures at Mizuho in New York. “It’s good for all industries, and especially for oil, because it is a demand indicator for crude demand,” Yawger said. While Yawger remains pessimistic about a deal coming to fruition, he said it is lending temporary strength to the market.

The November Brent contract expired on Wednesday, to be replaced by the December contract, which settled up 74 cents at $42.30 a barrel.

Also supporting prices, U.S. weekly crude inventory data showed stockpiles fell by 2 million barrels in the week to Sept. 25, a deeper draw than analysts had expected.

Today’s Market opening

Oil holds steady this morning Thursday on hopes for U.S. stimulus agreement.
Oil prices were little changed in early trade on Thursday after U.S. lawmakers postponed a vote on a $2.2 trillion coronavirus relief package in hopes of reaching a bipartisan deal, while rising infections fuelled demand fears.

U.S. West Texas Intermediate (WTI) crude futures slipped 1 cent to $40.21 a barrel at 0146 GMT, after jumping 2.4% on Wednesday.
Brent crude futures rose 3 cents to $42.33 a barrel, after falling 0.2% overnight.

Don’t forget Brent Front Month contract changed today from November to December delivery month. The difference between the two contracts is $1.38 plus at closing last night, which will push bunker prices based on Brent upward today.

U.S. Treasury Secretary Steven Mnuchin said talks with House Speaker Nancy Pelosi made progress on COVID-19 relief legislation.

WTI jumped on Wednesday after data from the U.S. Energy Information Administration showed crude stocks and distillate inventories, which include diesel and jet fuel, fell more than expected in the latest week.

But demand worries remain. Concerns are growing in New York, where COVID-19 infection rates continued to climb. The pandemic has infected more than 7.2 million and killed more than 206,000 people in the United States.

Growing supply from the Organization of the Petroleum Exporting Countries (OPEC) also weighed on the market, with output having risen by 160,000 barrels per day in September from August as some Libyan installations restarted and Iran’s exports grew, a Reuters survey found.
It is hard to see any upside for Oil prices in a near future.

We expect Fuel Oil bunkers 380 HS and VLSFO to rise between 6.0 – 8.0 USD/MT and MGO up 4 USD/MT. The market is trading slightly lower.