MABUX: Bunker market this morning, Mar 18, 2021
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 slight downward changes on March 17:
HSFO: USD/MT – 431.60 (-1.77)
VLSFO: USD/MT – 535.52 (-1.28)
MGO: USD/MT – 606.21 (-1.06)
Correlation between the Market Bunker Price Index (MBP) vs MABUX Digital Bunker Price Index (DBP) in four major hubs on Mar.17 remained undercharging of 380 HSFO bunker grades in all selected ports in a range from minus 5 USD (Houston) to minus 24 USD (Rotterdam). VLSFO is undercharged in Rotterdam (-18USD) and Singapore (-29USD) and overcharged in Fujairah (+9USD) and Houston (+18USD). MGO LS is also undervalued in Rotterdam (-38USD) and Singapore (-36USD) while it is overcharged in Fujairah (+10USD) and Houston (+14 USD).
Meantime, world oil indexes decreased on March 17.
Brent for May settlement decreased by $0.39 to $68.00 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for April fell by $0.20 to $64.60 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.40 to WTI. Gasoil for April delivery lost $6.25.
Today oil indexes continue to slide down after the International Energy Agency (IEA) said it will take at least another two years for global demand to return to pre-pandemic levels and official data showed a rise in U.S. crude and fuel inventories
In its monthly report, the IEA said inventories still looked ample despite producer alliance OPEC+ withholding between 8 million and 9 million barrels per day (bpd). The Agency said it could take another two years or more for the market to realize pre-pandemic demand could bring some pressure at least on prices. At the same time, the U.S. Energy Information Administration (EIA), reported that crude inventories increased 2.396 million barrels last week, compared with expectations for a build of 2.96 million barrels. On the production front, the EIA retained a daily estimated output of 10.9 million barrels for last week, after the previous week’s drop to 10 million. That suggested that drilling for oil has normalized from the Texas disruptions and refining activity was returning to normal.
A number of European countries have halted use of AstraZeneca's COVID-19 vaccine because of concerns about possible side effects. Germany is also seeing a rise in coronavirus cases, while Italy plans a national lockdown for Easter land France will introduce tougher restrictions. That also puts some pressure on oil indexes.
We expect bunker prices may continue downward changes today. Prices for 380 HSFO may decrease by 1-3 USD, prices for MGO may decline by 5-8 USD.
