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MABUX: Bunker Market Could Continue Its Upward Trend Today

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) changed irregular on Apr.02:

380 HSFO – USD/MT – 415.14(+1.14)
180 HSFO – USD/MT – 461.71(+0.71)
MGO – USD/MT – 629.21(-4.43)

Meantime, world oil indexes rose on Apr.02 on the prospect that more sanctions against Iran and further Venezuelan disruptions could deepen an OPEC-led supply cut.

Brent for June settlement increased by $0.36 to $69.37 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for May delivery added $0.99 to $62.58 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 6.79 to WTI. Gasoil for April delivery gained $7.00.

Today morning oil indexes continued moderate upward trend.

OPEC’s oil production in March 2019 fell to its lowest level since February 2015, as Saudi Arabia cut more than it had pledged under the output cut deal and Venezuela continued to struggle amid U.S. sanctions and a major blackout. The combined production of all 14 OPEC members stood at 30.4 million bpd last month, down by 280,000 bpd compared to February and the lowest level of OPEC production since February four years ago. The eleven OPEC members with quotas (with Iran, Venezuela, and Libya exempted) had a combined compliance of 135 percent in March, surging from 101 percent in February.

Russia fell short of its oil-output cut target for March. The nation’s production at the end of March was 190,000 barrels a day below October levels. Russian Energy Minister Alexander Novak had previously said April would be the first month that Moscow achieved full compliance with the output deal. Russia secured an effective exemption on cuts through the winter, a time when field maintenance poses particularly big challenges.

Iran’s Oil Minister Bijan Zangeneh arrived in Moscow on Apr. 01 for senior-level talks regarding the global oil market and energy cooperation between Iran and Russia. Russia was reportedly the deal broker that convinced Iran to agree to the wording of the production cut deal that began on January 1 and currently expires in June. The visit of the Iranian oil minister in Moscow comes a month before the United States is due to decide whether to extend all or some or none of the waivers it had granted to key Iranian oil customers when it re-imposed the sanctions in early November. While the U.S. Administration says that it continues to pursue zero Iranian oil exports, it is expected Washington to extend waivers to at least a few of the currently exempted buyers. The U.S. waivers for eight key Iranian oil customers, including China, India, Japan, and South Korea, expire in early May.

The years-long political crisis in Libya (divided between a UN-backed government based in Tripoli and an alternative administration and institutions in the east), could be solved this month by the creation of a single government. Since the toppling of Muammar Gaddafi in 2011, the division in Libya’s political landscape has resulted in frequent attacks on oil fields (first of all, on the biggest one – Sharara) and infrastructure from various groups. For years, Libya has been struggling to keep its oil production above 1 million bpd, compared to 1.6 million bpd before the civil war began. Sharara has been one of the main reasons why Libya is widely seen as a wild card in global oil and fuel price forecasts.

New data from China showed the largest monthly increase in the manufacturing purchasing managers’ index since 2012. The data diminished concerns about China’s impending slowdown. Moreover, there is hope that the U.S.-China trade talks lead to a breakthrough and the removal of tariffs, which would erase one of the largest downside risks to the oil market. Chinese Vice Premier Liu He is set to travel to Washington to meet U.S. negotiators today.

The American Petroleum Institute (API) reported a build in crude oil inventory of 3.0 million barrels for the week ending March 29, coming in over analyst expectations of a ¬425,000-barrel draw. Last week, the API reported a surprise build in crude oil of 1.93 million barrels. A day later, the EIA confirmed the build, estimating that crude inventories had grown by 2.8 million barrels. US crude oil production as estimated by the Energy Information Administration showed that production for the week ending March 22—the latest information available—stayed flat at an average of 12.1 million bpd—the all-time high for the United States. The U.S. Energy Information Administration report on crude oil inventories is due to be released later today.

We expect bunker prices may continue upward evolution today in a range of plus 2-7 USD.
Source: Marine Bunker Exchange

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