• 2018 October 18 14:24

    Bunker prices may change irregular next week amid rising volatility on global fuel market, expert says

    The Bunker Review is contributed by Marine Bunker Exchange
     
    World oil indexes ended last week with the first weekly loss in a while under the combined weight of various bearish factors, and downward trend continues this week as well. Some analysts still believe we could witness Brent at US$100 a barrel before the year’s end, while others are more guarded in their predictions. The market still questions whether OPEC can continue to produce oil in sufficient quantity to offset what is sure to be growing production declines in Iran and Venezuela.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs), demonstrated slight downward evolution in the period of Oct.11 - Oct.18:
        
    380 HSFO - down from 486.36 to 478.29 USD/MT (-8.07)
    180 HSFO - down from 530.64 to 525.93 USD/MT (-4.71)
    MGO         - down from 752.00 to 737.43 USD/MT (-14.57)


    The Paris-based International Energy Agency (IEA) lowered its oil demand growth forecasts for 2018 and 2019 by 110,000 barrels a day (bpd), to 1.3 million bpd and 1.4 million bpd. The agency said that despite fresh U.S. sanctions set to take effect on Iran’s energy sector on November 5, global oil supply still remains robust. The IEA noted that global oil production increased by 1.4 million barrels per day on a net basis since May, which helped lead to an inventory build at an average rate of 0.5 million bpd during the second quarter and likely the third quarter as well. As a result of a sizable stockpile of oil in storage, and these higher levels of production, the oil market is not in danger of shortages at the moment. However, that has come at the expense of spare capacity, which is already down to only 2 percent of global demand.

    Diplomatic tensions escalated between Saudi Arabia and the West over the disappearance of journalist Jamal Khashoggi, who was a prominent critic of Riyadh's policies. Blocking potential investments deals or military sales could be already part of the discussions in Washington, London or Brussels. Saudi Arabia has said it will conduct an investigation into the disappearance. Market is concerned that Saudi Arabia could use oil supply to retaliate against its critics.

    Market also assumes the U.S. trade war with China to continue escalating, perhaps at an even more accelerated rate, when U.S. sanctions officially hit Iran next month. The counter-Iran action, however, is likely to be undercut by China, which currently buys around one quarter of Iranian crude and will not be joining a unilateral cut-off of Iranian oil imports. On the other part, in August China’s purchases of oil from the U.S. fell to zero, after China had been the largest buyer of American crude in the first half of the year. U.S. producers are still finding buyers, but are having to look elsewhere. Meanwhile, Russia and Saudi Arabia are replacing the U.S. as the main suppliers to China.

    Meantime, the U.S. has decided to go ahead with a planned meeting between President Trump and Chinese leader Xi Jingping in November to see if they can overcome trade differences. The U.S. Treasury is expected conclude that China has not been manipulating its currency, which is seen as a small overture to China from Washington. Some American officials that oppose the trade war hope that the Trump-Xi meeting could lead to a breakthrough.

    South Korea in turn has stopped importing crude oil from Iran ahead of the U.S. sanctions. The country imported zero Iranian oil in September for the first time in six years. Since the start of 2018, South Korean imports of Iranian crude had fallen by 49.1 percent from 2017, as of the end of September, to a total 7.15 million tons. South Korea is a close ally of the United States, and it is no surprise the country opted for full compliance with Washington’s insistence.

    In the first two weeks of October, Iran’s oil exports averaged 1.3 million barrels per day, down from the 1.6 million bpd it averaged in September, and down from the recent peak of 2.5 million bpd in April. As per OPEC sources, Iran’s oil production in September plunged by 150,000 bpd from August to reach 3.447 million bpd last month. It might be considered as the evidence that Iran has been cutting oil production, although not at the fast rate at which its exports have been dropping over the past two months. Iran, for its part, claims a much smaller loss in its oil production: Tehran self-reported to OPEC that its crude oil production in September stood at 3.755 million bpd, down by 51,000 bpd from August. Among all OPEC members, Iran booked the steepest decline in production in September, followed by another slump in Venezuela, this time by 42,000 bpd to 1.197 million bpd.

    Other OPEC members, however, almost entirely compensated for the loss of production in Iran and Venezuela—OPEC’s total production increased by 132,000 bpd in September to 32.761 million bpd. OPEC’s biggest producer Saudi Arabia lifted output to 10.512 million bpd. Another big jump came from Libya: production rose by 103,000 bpd to average 1.053 million bpd. Angola and Nigeria also contributed to the cartel’s higher production. OPEC’s key partner in the deal with the non-OPEC nations—Russia hit a post-Soviet record at 11.54 million bpd in September, up by 150,000 bpd from August.

    The latest Drilling Productivity Report from the EIA shows strong gains expected for next month. The EIA predicts the U.S. will add 98,000 bpd in November compared to a month earlier.

    China’s independent refiners will probably increase their intake of foreign oil by 23.9 percent to 2.1 million bpd this month. The total for the month will come in at 9 million tons, which is up from 7.26 million tons for September and will also be driven by falling inventories that need filling up and the nearing end of the year: private refiners have to use their import quotas before the new year starts. Beijing announced it will raise by 42 percent the oil import quota for its non-state refiners for 2019 as new refinery capacity is planned to enter into operation next year. As a result, freight rates for Aframax tankers to Asia have reached their highest level so far this year.

    North and South Korea agreed on Oct.15 to begin reconnecting rail and road links, another step in an improving relationship. They also agreed to discuss late this month a plan to pursue a bid to co-host the 2032 Olympic Games, and to explore in November ways to restart webcam reunions and video exchanges for families separated by the Korean War. Besides two countries dis-cussed a military pact which includes the reinstatement of a joint military commission, the halting of military exercises, a no-fly zone near their border and the gradual removal of landmines and guard posts within the Demilitarised Zone (DMZ). The thaw in ties between the neighbour countries has sparked U.S. concerns that it may be outpacing negotiations to dismantle the North's nuclear and missile programs.

    We expect bunker prices will change irregular next week amid rising volatility brought about by the impending U.S. sanctions against Tehran and the uncertainty surrounding other producers’ capacity to increase production quickly enough to offset any supply loss.

     

     

     

     

     

     

    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 April 19

18:07 Keppel posts net profit of S$203M in 1Q 2019
17:28 Passenger Port of Saint-Petersburg to complete Phase 1 of Berth No7 reconstruction in summer 2019
17:04 Saudi Aramco partners with the Saudi Contractors Authority fostering collaboration at ‘Future Projects Forum’
16:57 BAE Systems Jacksonville secures Navy's conntract mod for DDG 117
15:04 Hyundai LNG Shipping announces order for one VLGC at HHI
14:55 Marina for 100 yachts to be built in Feodosia by Firm “TES” LLC
14:10 C-Fenna successfully completes Fugro 1200 jackup towing operations
13:32 ESPO congratulates Port of Huelva for renewing EcoPorts’ environmental management standard
13:07 Spirit of Vancouver Island vessel returns to service after mid-life upgrade including conversion to natural gas
12:44 New High Bay Container Storage system launched as “BOXBAY”
12:10 ABS teams with industry leaders to improve container vessel safety
11:39 Port Arthur LNG receives FERC authorization for export project in Texas
11:08 Dual-fuel AET tankers conduct maiden LNG bunkering
10:43 Largest barge of Azerbaijan Caspian Shipping Company undergone overhaul
10:19 Brent Crude futures price is down 0.04% to $71.95, Light Sweet Crude – up 0.38% to $64
09:56 Bunker prices are sable at the port of Saint-Petersburg, Russia (graph)
09:35 TransContainer’s transportation volumes in Q1’2019 increased by 7.7% Y-o-Y to 492,000 TEUs
09:17 Baltic Dry Index is up to 790 points
07:42 GTT receives an order from DSME for the tank design of a new LNG carrier

2019 April 18

18:36 South Stream Transport B.V. and Saipem announce the amicable settlement of mutual differences
18:06 Seaway 7 selected as partner to develop Hollandse Kust Zuid Offshore Wind Farm
17:36 WinGD reports strong first quarter 2019
17:11 Launching ceremony held for eighth shallow-draft barge of Project ROB20
17:05 SOFEC completes engineering, supply and delivery of mooring system
16:26 Port of Murmansk to welcome eight cruise liners in summer season of 2019
16:05 Cooperation agreement between Eimskip and Royal Arctic line approved by the Icelandic Competition Authority
15:44 Navios Acquisition announces $103.2 million sale and leaseback transaction for three MR2 product tankers and two LR1 product tankers
15:12 Nefteflot laid down two barges of Project RDB12 ordered by STLC
15:10 MOL to acquire strategic stake in six group companies, each owning a Very Large Ethane Carrier
14:40 Port of Rotterdam freight throughput grows by 5.1% in first quarter of 2019
13:44 Bunker prices are slightly up at the Far East ports of Russia (graph)
13:03 Biggest European shipbuilders collaborate on vessel connectivity in project Code Kilo
12:49 NOVATEK reports preliminary operating data for the first quarter 2019
12:13 Frontex, EMSA and EFCA open second annual European Coast Guard Event
11:51 RF Navy’s Northern Fleet takes part in combat training missions as part of final check for winter training season
11:27 ASCO took part in TransRussia-2019
11:00 ZIM joins to blockchain shipping solution TradeLens
10:44 Shareholders agreement on construction of Lavna terminal signed under Murmansk Transport Hub project
10:28 Brent Crude futures price is up 0.1% to $71.69, Light Sweet Crude – up 0.09% to $63.82
10:09 ABS teams with industry leaders to improve container vessel safety
09:53 Keppel secures integration and upgrading contracts worth around S$160 million
09:37 Tri-City ports take part in Seatrade Cruise Global
09:36 Bunker Market this morning, April 18
09:15 Baltic Dry Index is up to 767 points

2019 April 17

19:00 SMS Towage’s Humber fleet adds new tug
18:36 CMA CGM has announced FAK rates from Asia to North Africa
18:06 DESMI's CompactClean Ballast Water Management System receives US Coast Guard Type Approval
17:36 Denmark's first new-build hybrid ferry on key passenger route
17:06 CMA CGM announces FAK rates from Asia to the Mediterranean
16:38 Matson receives new cranes at its Honolulu hub terminal
16:17 Stena Europe undergoes refit upgrades in Turkey
16:11 Kuehne + Nagel launches first online seafreight service solution with guaranteed lead time in container shipping
15:40 HELCOM addressed nutrients, stormwater and microlitter issues at PRESSURE 10-2019
15:04 Murmansk Commercial Seaport commissions dust and wind shields
14:39 Port of Riga and Port of Qingdao sign Cooperation Agreement
14:02 Damen launches two road ferries for Canadian operator BC Ferries
13:22 DNV GL awards CMHI AIPs for two new offshore designs
12:53 Pacific Fleet warships and Royal Thai Navy hold joint trainings in the Sea of Japan
12:31 Port of Cardiff prepares for start of 2019 cruise season
12:22 Tristar Group signs second major deal with Shell for 6 chemical tankers