• 2018 September 20 21:17

    Expert says production declines and geopolitical unrest may push bunker prices up

    The Bunker Review is contributed by Marine Bunker Exchange

    World oil indexes have not had any firm trend during the week: fuel markets are trying to make sense out of both supply and demand questions as well as geopolitical uncertainty. OPEC downgraded demand while the IEA said in a report that supply outages are tightening up the oil market.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), demonstrated insignificant and irregular changes in the period of Sep.13 - Sep.20:
        
    380 HSFO – up from 448.79 to 451.57 USD/MT     (+2.78)
    180 HSFO – up from 494.86 to 495.79 USD/MT     (+0.93)
    MGO        – down from 714.14 to 710.29 USD/MT (-3.85)

    The International Energy Agency (IEA) reported that the oil market is tightening up. Global supply surpassed 100 million barrels per day (bpd) in August, a new record high. Production even rose from OPEC, despite turmoil seen in several member countries. As per EIA, the main reason for the volatility is the ongoing supply losses from Venezuela, combined with the disruptions in Iran related to U.S. sanctions. Venezuela’s production fell by another 40,000 bpd or so, taking output down to just 1.24 million bpd. It may end the year at 1 million bpd or lower. Meanwhile, buyers are already cutting their purchases of Iranian oil ahead of the November 4 deadline.

    OPEC in turn cut its 2019 oil demand forecast because of economic headwinds. The 1.41 mil-lion bpd demand growth forecast is 20,000 bpd lower than last month’s figure.

    China is going to retaliate against new U.S. trade measures after Trump imposed 10 percent tariffs on about $200 billion worth of Chinese imports. The tariffs are likely to limit economic activity in both China and the United States, potentially hitting growth in demand for oil as less fuel is consumed to move goods for trade.

    U.S. sanctions on Iran are set to go into effect in November, but countries have already been slashing purchases. China however has said that it would not stop buying Iranian oil (although Beijing has agreed not to increase its oil purchases from Iran). Between January and August, Iran was sending on average 660,000 bpd of oil to its biggest oil customer. Total Iranian oil shipments for September slumped to 1.3 million bpd through September 13, compared to just above 2 million bpd in August, when Iranian exports started to fall noticeably. Although the shipment gap is unlikely to signal that China has been purposefully scaling back purchases to comply with U.S. pressure to have Iranian oil sales at zero, it could mean that Chinese refiners were looking for better terms for Iranian oil purchases.

    Iran in turn has started to store oil on tankers in the Persian Gulf. Shipments are set to average as little as 1.5 million barrels a day in September according to the preliminary loading program, compared to around 2.8 million barrels a day of oil exports in April and May. Between 2012 and 2016, Iran stored millions of barrels of oil on supertankers because it could not export enough. That practice is making a comeback.

    The protests and riots in Iraq’s oil-rich southern region are flaring up again, potentially posing a threat to lose upwards of 700,000 to 800,000 barrels of production in the country’s record oil export levels. The lack of spare capacity makes such an outage especially worrying.

    U.S. Secretary of Energy Rick Perry said during his meeting with Russia’s Energy Minister Alexander Novak in Moscow last week that the United States welcomes competition from Russia on the global energy markets, but Russia can no longer use energy as an economic weapon. He also confirmed that the U.S. could impose sanctions on Nord Stream 2 and more energy sanctions were being planned. Novak, for his part, said that Russia agrees that energy cannot be a tool to exercise pressure and that consumers should be able to choose the suppliers. Russian minister sees huge uncertainty on the market – how the countries, which buy almost 2 million barrels per day of Iranian oil will act. Russia could step in if the market needs more supply. The country has potential to raise production by 300,000 barrels per day mid-term.

    The U.S. Energy Information Administration (EIA) reported on Sep.11 that the U.S. bypassed Saudi Arabia in February to become the second largest global oil producer. It was the first time in more than 20 years that the U.S. out produced Saudi Arabia. Then in June and August, U.S. output bypassed Russia for the first time since February 1999. The EIA also expects that U.S. crude oil production, most of it light sweet crude, will continue to exceed Russian and Saudi Arabian crude oil production for the remaining months of 2018 and through 2019. U.S. production this year is expected to grow 1.31 million bpd to 10.66 million bpd, and 840,000 bpd to 11.5 million bpd next year.

    The South China Sea has been a source of territorial conflict for years, but the Philippines and China are nearing a deal on joint development of natural gas reserves in the region. If a deal is reached, it would be a major win for Beijing as it seeks to extend its claim on territory in the sea, while also clearing some problems towards gas development.

    The global oil/fuel markets remain fragile because of production declines and geopolitical unrest. We expect bunker prices may continue 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)




2019 June 19

12:12 ICS meets in Faroe Islands
11:58 Frigate Admiral Gorhskov of RF Navy's Northern Fleet sails through Panama Canal
11:37 Ship inspection platform Idwal urges investors to carry out due diligence on asset condition as standards decline
11:19 WMU signed MOU with Higher Institute of Maritime Studies, Morocco
11:12 Damen signs Phase II contract with International Organization for Migration for nine additional SAR 1906 search and rescue boats
10:55 ABB wins system package with Keppel for dredging contractor Van Oord
10:33 Lavna coal terminal to reach design capacity of 18 million tonnes in 2022
10:00 Bunker market sees mixed price movements at the port of Saint-Petersburg, Russia (graph)
09:38 MABUX: Bunker Market this morning, June 19
09:32 Brent Crude futures price is up 0.03% to $62.16, Light Sweet Crude – up 0.22% to $54.23
09:15 Baltic Dry Index is up to 1,135 points

2019 June 18

18:36 Spotlighting IMO's actions on climate change
18:31 Transborders Energy signs joint study agreement with Kyushu Electric Power for FLNG Solution
18:06 Kim Heng Offshore & Marine Holdings signs MoU with HHC and Thaitan
18:03 Container service boost at Bristol Port
17:53 IMO and UN Environment – working together to keep the Mediterranean clean
17:36 ZIM introduces myZIM Personal Notifications
17:21 Incat launches a new 111-metre ferry for Spain
17:06 Hapag-Lloyd announces General Rate increase from Japan to Middle East
16:42 Nor-Shipping 2019 sets new records
16:20 Fincantieri and CNR present the results of six multidisciplinary research projects
16:04 Atlantic Towing buys Havyard 833 WE – build no 126
15:25 Live stream of IWW passenger transportation meeting, part of SmartTRANSPORT, starts on IAA PortNews website at 10:00, June 21
15:04 Port of Oakland approves Seaport Air Quality 2020 and Beyond Plan
14:33 Carnival Mardi Gras cruise ship hull assembly begins at Meyer Turku shipyard
14:02 Hapag-Lloyd announces FAK from East Asia to Europe and Mediterranean
13:30 Port of Singapore bags “Best Seaport in Asia” for 31st time and also “Best Green Seaport”
13:02 Major shipping banks to launch the Poseidon Principles in line with IMO’s Greenhouse Gas strategy
12:41 Russia's Main Department of State Expertise approves revised project for Phase 1 of dry bulk terminal in Taman
12:28 Bunker prices show slight changes at the Far East ports of Russia (graph)
12:24 Jan De Nul secures Formosa 2 OWF contract in Taiwan and underlines its expansion in Asian OWFs
12:05 AtoB@C starts to offer port towage and related services in Port of Raahe
11:39 East-Siberian Inland Navigation Company launches bunkering tanker of Project RT37 for Baikal
11:16 Regional Manager Simon Neo set to leave IBIA
10:52 IBIA board member elected President of the Panama Maritime Chamber
10:47 NAVTOR integrates environmental regulations into voyage planning with Total Marine Solutions MOU
10:27 Maritime spatial planning in the Baltic Sea region easier with BASEMAPS
09:53 Brent Crude futures price is down 0.05% to $60.91, Light Sweet Crude – down 0.1% to $51.88
09:35 MABUX: Bunker Market this morning June, 18
09:15 Baltic Dry Index is up to 1,093 points

2019 June 17

18:24 USCG saves six people, tows disabled vessel in Port Etches
17:59 Denis Krylov appointed General Director of Gazpromneft-Sakhalin
17:28 China and South Korea agree on ballast water exchange rules
17:04 Mermaid Maritime borrows a loan of USD 65 mln to extend the financing of two vessels
16:41 Neptune Lines welcomes Neptune Galene & Neptune Thalassa after scrubber installation
16:23 DG Termināls invests about 1 million euros during the year
16:17 Finnish ferry getting a diesel-electrical drivetrain system
16:04 MSC Katya R. sets record as largest container ship to boost Costa Rican export links to Europe
15:45 Singapore to host 18th Vessel Efficiency & Fuel Management Summit
15:26 Onezhsky Shipyard launches multifunctional buoy tender for Volga-Baltic Basin
15:04 Hunter Group sells one vessel
14:42 Gdansk, Poland to host 6th Operating Specialist Wind Vessels Summit
14:19 Seatrade Europe conference programme to include Marine Interiors specialist panel discussions
14:12 ClassNK releases amendments to class rules
13:55 Finland hosts an EU–China maritime meeting
13:31 AWT completed stage III of modernization and expansion of the Paskov Terminal
13:24 Average wholesale prices for М-100 HFO down to RUB 16,007 in RF spot market
13:10 The Irish Port of Cork and Port of Amsterdam to collaborate
12:48 Pella Shipyard launches tugboat of project 90600, Sadko, built for Sevmash-Shelf (video)
12:31 Port of Oakland exports up 8.4 percent in May 2019