2020 October 23 08:49
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 October 22:
380 HSFO - USD/MT – 297.56 (-1.39)
VLSFO - USD/MT – 348.00 (-2.00)
MGO - USD/MT – 411.70 (-2.67)
Meantime, world oil indexes increased on the hopes of a new stimulus package and the better-than-expected job figures.
Brent for December settlement increased by $0.73 to $42.46 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for December rose by $0.61 to $40.64 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $1.82 to WTI. Gasoil for November delivery added $8.25.
Today oil indexes continue to rise after Russian President Vladimir Putin indicated he would be prepared to extend record supply cuts in the face of the COVID-19 pandemic.
Putin said on Oct.22 that Russia did not see a need for major oil producers to alter a deal on cutting global supply, but did not rule out extending oil cuts if market conditions warranted. That was the clearest indication so far from Russia that it is prepared to extend unprecedented curbs on output to meet the demand slump caused by the pandemic. His comments come as OPEC mulls easing the cuts, in place until the end of the year, and as the worsening COVID-19 pandemic threatens to further dampen fuel demand.
At the same time, the semi-autonomous Kurdistan region in Iraq has agreed to reduce the region’s crude oil production as part of the ongoing OPEC+ agreement. The statement came after Iraq’s Oil Minister Ihsan Abdul Jabbar said earlier this week at an online petroleum conference that “the Kurdistan Region has not been contributing to OPEC+ cuts.” Iraq, the least compliant member of the OPEC+ production cut pact, has promised for months to reduce its oil production and fall in line with its quota—something it hasn’t done since 2017. In recent months, Iraq has come under pressure from its fellow OPEC+ partners led by Saudi Arabia to stop cheating on their production quotas and finally start complying with the agreement.
Speaker Pelosi said that talks with Treasury Secretary Steven Mnuchin continue and a coronavirus relief deal could be imminent.
Additional support to the markets came from the U.S. Department of Labor, which said that new weekly jobless claims in the U.S. were 787,000 for the last week. The figure was lower than analysts had expected— 870,000 unemployment benefit claims.
Some pressures on oil indexes also remains from the gradual increase in production in Libya, which is now estimated to be producing at over 500,000 barrels a day, up from barely 100,000 barrels a day in the summer.
At the same time, the number of COVID-19 cases continue to surge in Europe and the U.S., prompting the re-introduction of restrictive measures and putting further pressure on demand. With the weather cooling as winter approaches, several U.S. states saw a record number of daily new cases, suggesting that the spread of the virus is accelerating. France also extended curfews throughout two thirds of the country.
We expect bunker prices may demonstrate upward changes today: 2-4 USD up for IFO and 6-8 USD up for MGO.