MABUX: Bunker Market Expected to Heat Up Today

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) demonstrated irregular changes on Mar. 20

380 HSFO – USD/MT 419.50 (+1.07)
180 HSFO – USD/MT 467.50 (+1.21)
MGO – USD/MT 637.93 (-0.14)

Meantime, world oil indexes demonstrated upward changes on Mar. 20 after a draw of U.S. crude oil inventories.

Brent for May settlement increased by $0.89 to $68.50 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for May delivery rose by $0.94 to $60.23 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 8.27 to WTI. Gasoil for April delivery increased by $9.25.

Today oil indexes continue to rise amid supply cuts led by producer club OPEC and U.S. government sanctions against Iran and Venezuela

According to EIA U.S. crude oil inventories fell at their fastest rate since July 2018 last week – by 9.59 million barrels, adding to a drop of 3.86 million barrels in the previous week. It was expected a modest stockpile build of 0.31 million barrels. The EIA report also showed that gasoline inventories fell by 4.59 million barrels, nearly twice the expected draw of 2.41 million barrels, while distillate stockpiles dropped by 4.13 million barrels, compared to forecasts for a decline of 1.09 million.

Aggressive production cuts carried out by OPEC, headed by Saudi Arabia, and another 10 allies of the oil-producing club, led by Russia, were in the spotlight this week as both the kingdom and Moscow stressed their plans to increase compliance with the output reduction. The Saudi Energy Minister Khalid al-Falih and Russian counterpart Alexander Novak canceled an April meeting in favor of a more sensible decision when the end of the current pact arrives in June.

U.S. crude imports from Venezuela dropped to zero last week, for the first time on record. Imports from Venezuela, historically one of the biggest suppliers of crude to the United States, have slumped from about 587,000 barrels per day (bpd) in late January after Washington hit Venezuelan President Nicolas Maduro’s government, his political allies and the country’s state-owned oil company PDVSA with a series of sanctions.

The United States granted Iraq a 90-day waiver exempting it from sanctions to buy energy from Iran, the latest extension allowing Baghdad to keep importing Iranian gas that is critical for power production. The last waiver for Iraq to be exempt from U.S. sanctions on Iran was granted on Dec. 21. Iraq relies heavily on Iranian gas to feed its power stations, importing roughly 1.5 billion standard cubic feet per day via pipelines in the south and east.

U.S. President Donald Trump said a trade deal with Beijing was coming along nicely, with U.S. trade negotiators poised to head to China next week for another round of talks. Asked about lifting tariffs on China, he mentioned, that there are no talks about removing them, but about leaving them for a substantial period of time. Washington and Beijing have slapped import duties on hundreds of billions of dollars worth of each other’s products in their dispute, raising costs, roiling financial markets, shrinking U.S. farm exports and disrupting manufacturing supply chains. The face-to-face talks will be the first since Trump delayed a March 1 deadline to avert a rise in tariffs on $200 billion worth of Chinese imports from the current 10 percent to 25 percent. The negotiations aim to ending an eight-month trade war between the world’s two largest economies.

Expect bunker prices to demonstrate upward changes today: 4-6 USD up for IFO, 7-9 USD up for MGO.
Source: Marine Bunker Exchange