• 2018 July 12 18:03

    High volatility in global bunker market, expert says

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes prices have demonstrated rather volatile fluctuations during the week: fears of the escalating U.S.-Chinese trade war and increased production by Saudi Arabia and Russia pulled against concerns over supply disruptions from Venezuela and Libya as well as the looming sanctions on Iran. However, despite a significant draw in U.S. inventories by nearly 13 million barrels, fuel indexes fell on Jul.11 as Libya restored production and the U.S. softened its stance regarding Iranian oil sanctions. At the moment there are some signs that the market is recouping some of heavy losses from the previous session.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) resulted in insignificant irregular changes in the pe-riod of Jul.05 - Jul.12:
        
    380 HSFO - down from 447.71 to 445,36 USD/MT (-2.35)
    180 HSFO - up from 483.86 to 485,50 USD/MT     (+1.64)
    MGO        - down from 680.79 to 678.29 USD/MT (-2.50)

    Barclays raised its oil price forecasts for Brent Crude and WTI Crude for 2018 and 2019, and sees Brent Crude averaging $73 per barrel, and the U.S. benchmark averaging $65 a barrel next year, as it expects lower supply from Iran and Libya to further tighten the oil market. According to the bank, OPEC and Russia’s decision to reverse some of the production cuts would deplete the global spare capacity and push prices up, but OPEC’s leader Saudi Arabia, as well as Russia, would be making efforts to cap a big upside in oil prices because much higher prices would destroy oil demand growth.

    U.S. tariffs on $34 billion worth of Chinese goods began on Jul.06, with retaliatory tariffs from China immediately implemented. China said the U.S. has now initiated the largest trade war in history. The escalation of the trade war is showing no signs of reaching a resolution and raising threats to global economic growth. Besides, a tariff of 25 percent on U.S. oil is under consideration in China. If that happens, Chinese demand would then shift to other suppliers driving oil/fuel prices further up (China is expected to import around 400,000 bpd from the U.S. in July).

    Meantime, Russia also imposed extra duties of 25-40 percent on some imports from the United States in response to Washington's tariff move. The extra duties will apply to imports of fiber optics, equipment for road construction, oil and gas industry, metal processing and mining. Be-fore it was declared that Russia will impose duties on goods which have Russian-made substitutes.

    Despite of started trade war Goldman Sachs maintained its bullish outlook on commodities, arguing in a research note that the trade war will not derail rising prices. The investment bank predicted a 10 percent return on commodities over the next 12 months.

    The Russian Finance Ministry has warned that the long-term equilibrium price level for crude oil is currently around US$50-60 a barrel, but actual prices are substantially higher than that and the current growth should be regarded as temporary. If oil prices continue to remain above long-term equilibrium levels, the price collapse will repeat again. The report, however, noted that the next price collapse could be avoided by boosting production in countries including the United States, Angola, Canada, and Brazil.

    Saudi Arabia ramped up production in June to 10.5 million barrels per day, or an increase of 500,000 bpd from a month earlier. Saudi Arabia’s all-time record high stands at about 10.7 mil-lion bpd and it looks like the country is planning to breach that level this month. It also seems that Saudis follow President Trump’s several demands published in twitter last week for more production.

    Libya saw its output fall to 700,000 bpd in June, down from 955,000 bpd in May. However, the standoff with General Khalid Haftar appeared to be on its way to some sort of resolution, with the militia handing the ports back over to the internationally-recognized NOC in Tripoli. As is always the case with Libya, the situation is fluid, and any return of production does not come with a guarantee that it will be sustained.

    The Trump administration is pushing countries to cut all imports of Iranian oil from November when the U.S. reimposes sanctions against Tehran. Last month, the State Department toughened its stance, insisting that imports of Iranian crude be reduced to zero, which naturally boosted international prices further. Meantime, last comments from U.S. Secretary of State Mike Pompeo seemed to soften America’s position and opened up the possibility that the U.S. won’t take a zero tolerance policy towards countries importing oil from Iran, or that there could be some sort of phased implementation.

    In such a situation world powers and Iran appeared to make no concrete breakthrough on Jul.06 in talks to provide Tehran with an economic package to compensate for U.S. sanctions. Ministers from Britain, China, France, Germany and Russia met their Iranian counterpart in Vienna for the first time since U.S. President Donald Trump left a nuclear accord in May. Iranian officials have said that key for them is to ensure measures that guarantee oil exports do not halt, and that Tehran still has access to the SWIFT international bank payments messaging system or an alternative.

    It was reported an increase in the number of active oil rigs in the United States last week. The overall rig count increased by 5 rigs, with all of that increase coming from oil rigs (bringing the total count to 863), the number of gas rigs stayed the same. The steady upward climb that U.S. oil production has been on throughout 2018 appears to have leveled off at 10.9 million bpd, where it has remained for five weeks now.

    Syncrude Canada’s 350,000-bpd outage at its oil sands facility was expected to last through July, but restoration could take longer than expected. The facility could be brought back online in phases, and full output might not be achieved until September or October.

    Still, we think that increased production may not be enough, and prices will be supported by the continuous drop of Venezuela’s and Iranian loss of exports. We expect bunker prices may continue slight upward evolution next week.


     

     

     

     

     

     

    All prices stated in USD / Mton
    All time high Brent = $147.50 (July 11, 2008)
    All time high Light crude (WTI) = $147.27 (July 11, 2008)




2018 November 16

18:07 Ocean Network Express announces delivery of 14,000 - TEU containership “ONE COLUMBA”
18:02 Sovcomflot reported its results for Q3 and 9M ending 30 September 2018
18:01 Throughput of port Vyborg in 10M’18 up 23% Y-o-Y to 1.53 million tonnes
17:42 Federal Antimonopoly Service of Russia approves amendments to railway transport tariffs
17:30 Keppel announces settlement agreement for termination of an integration project
17:17 Throughput of port Kaliningrad in 10M’18 grew by 5% Y-o-Y to 11.83 million tonnes
17:07 Van Oord and Ace Aquatec making FaunaGuard available for rest of the world
17:06 PaxOcean delivers largest FSRU to be built in China
16:55 Throughput of port Primorsk in 10M’18 fell by 10% Y-o-Y to 44.42 million tonnes
16:55 NYK develops advance water-in-oil alarm to prevent engine trouble
16:33 Throughput of port Vysotsk in 10M’18 climbed by 6% Y-o-Y to 15.34 million tonnes
16:28 Maersk Line receives Service Innovation Award for its Remote Container Management product
16:10 Bureau Veritas Chongqing Liansheng wins Global Project Excellence Award of IPMA 2018
15:48 Port of Ust-Luga handled 81.50 million tonnes in 10M’18, down 4% Y-o-Y
15:29 Port of St. Petersburg handled 49.14 million tonnes in 10M’18, up 12% Y-o-Y
15:10 ZIM announces Q3 2018 results
14:45 Jan De Nul supports the 6th Forum of Dredging Companies as its Sponsor
14:24 Decision on construction of 4th and 5th nuclear-powered icebreakers expected before year end
14:10 Diana Shipping announces time charter contract for m/v Thetis with Hudson
13:32 Entry fee for vessels to be changed at the Port of Ventspils in 2019
13:10 Global Ship Lease completes strategic combination with Poseidon Containers
12:55 Ship inspection to keep high standards
12:31 GoodBulk announces delivery of Supramax vessel to its new owners
12:04 CMA CGM announces FAK rates from ISC to North Europe and the Mediterranean
11:30 GTT receives an order from HHI to design the tanks of two new LNG carriers
11:25 Multipurpose Reloading Complex (Ust-Luga) boosts allocations for its development programme
11:04 ForSea completes conversion of the world’s largest battery ferries, powered by ABB
10:44 Wärtsilä, LUT University and Nebraska Public Power District to develop business case for alternative fuels
10:41 Nor-Shipping looks to achieve industry first with ISO sustainable event standard
10:20 Brent Crude futures price up 0.84% to $67.17, Light Sweet Crude – up 0.74% to $56.88
10:02 Portmaster improves efficiency in the Port of Scheveningen
09:57 High level experts to present at Maritime Reconnaissance and Surveillance Technology conference
09:35 Container throughput of port Hong Kong (China) down 5.4% to 16.3 million TEUs in Jan-Oct’18
09:16 Baltic Dry Index is up to 1,020 points

2018 November 15

18:03 Costa Smeralda to call on Cruiseport Rotterdam
17:54 Polish LNG Conference 2018 concludes in Warsaw
17:25 Port of Singapore throughput in 10M’18 grew by 0.7% Y-o-Y to 523.73 million tonnes
17:03 Maersk Line announces rates from Mediterranean to West and Central Asia
16:52 Expert says downward trend in bunker prices may continue next week
16:30 Nevsky Shipyard launched dry cargo vessel of Project RSD59 «Pola Anfisa»
16:19 "K" Line takes delivery of coal carrier “SHONAI MARU” for JERA Trading
16:04 ICTSI names new APAC head
15:22 Meyer Turku starts construction of Carnival XL1
15:03 Port of Antwerp signs an agreement with Enabel
14:34 Throughput of Ukraine’s seaports in 10M’18 declined by 0.7% Y-o-Y to 108 million tonnes
14:03 Pavilion Energy and Novatek agree to strengthen their LNG partnership
14:00 Damen hands over four FCS 2610 vessels to Allianz during ADIPEC
13:36 ABS awards industry’s first offshore facility cyber security-ready notation to Sembcorp Marine
13:23 NOVATEK’s Board of Directors to be elected on 18 January 2019
13:00 Zvezda shipyard started serial manufacturing of Aframax-class tankers
12:39 Residents of Riga and the Port outline a common vision for the future
12:04 Singapore hosts 10th APEC Port Services Network (APSN) Port Connectivity Forum
11:48 Bunker prices are still high in the Far East ports of Russia (graph)
11:22 Sea Port of Saint-Petersburg’s allocations for its development programme totaled RUB 413.5 million in 9M’2018
11:03 NYK promotes decarbonization through exploratory design of NYK Super Eco Ship 2050
10:51 ABS and HHI pioneer Cyber Security standard for new vessels
10:25 Brent Crude futures price down 0.18% to $66, Light Sweet Crude – down 0.36% to $56.05
10:11 OOCL introduces new Asia – South Africa direct services
09:58 A.P. Moller – Maersk, CMA CGM, Hapag - Lloyd, MSC and Ocean Network Express plan to establish container shipping association
09:38 ASW Severomorsk of RF Navy's Northern Fleet completed a call to the Republic of Djibouti