MABUX: Bunker Weekly Outlook, Nov 12
The Bunker Weekly Review was contributed by Marine Bunker Exchange (MABUX)
Oil and fuel prices rose this week after Pfizer announced that its vaccine would be more than 90% effective for the coronavirus
The World Bunker Index MABUX has demonstrated firm upward evolution during the week. The 380 HSFO index rose from 296.50 to 312.81 USD/MT (+16.31 USD), VLSFO added 24.00 USD: from 345 to 369 USD/MT while MGO gained only 28.06 USD: from 404.89 up to 432.95 USD/MT. The Global Scrubber Spread (SS) (price difference 380 HSFOs vs VLSFOs) has widened by 7.99 USD and averaged USD 53.32 (45.33 USD a week ago).
MABUX presents new Bunker Price Benchmark – DIGITAL BUNKER PRICE (DBP) – which relates entirely on Oil Future differentials. Among other features DBP is a tool to identify overcharge/undercharge bunker prices and shows real-time bunker price trend updating every 1 minute. The function is available in 35 world major ports. More details at www.mabux.com.
Comparison of average Market Bunker prices (MBP) vs the DBP index over the past week shows that bunker fuels are overcharged in almost all four ports used for valuation: Rotterdam, Singapore, Fujairah and Houston. The overcharge rate of 380 HSFO was between +25 USD (Rotterdam) and +42 USD (Fujairah), VLSFO – between +23 USD (Rotterdam) and +37 USD (Fujairah). MGO LS was overcharged in Fujairah (+31 USD) and Houston (+15 USD) but undercharged in Rotterdam by 5 USD and in Singapore by 18 USD.
Average MBP Index vs Average DBP Index, Nov.04-11, 2020.
Diesel consumers are likely to face an uncomfortable fact: the capacity to refine crude oil into traditional diesel fuel is starting to shrink in the U.S. and ultimately the world. One of the reasons is that there is simply too much refining capacity in the world and there will be efforts needed to cull it. It is expected that worldwide refining capacity cuts to total about 5 million bpd, with about half of that coming from North America. Against a worldwide oil market of about 97 million bpd, down from the pre-pandemic level of 100 million bpd or slightly more, a cut that big is significant.
The Suez Canal Economic Zone (SCEZ) has outlined plans to issue bunkering licenses for overseas operators to begin offering traditional bunker fuels and LNG bunkers within the SCEZ. These will be on a non-exclusive basis, suggesting that several foreign bunker suppliers could be competing for business in Egypt next year. The first bunkering licences to allow bunkering operations within the six ports inside the SCEZ could be issued as early as Q1 2021.