MABUX: Bunker Market this morning, Aug 23.
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) rose on Aug. 22
380 HSFO – USD/MT 357.77 (+3.44)
180 HSFO – USD/MT 404.11 (+3.52)
MGO – USD/MT 641.17 (+3.52)
Meantime, world oil indexes demonstrated slight downward changes on Aug. 22 as weak U.S. factory data highlighted demand concerns, and prospects of a Federal Reserve interest rate cut.
Brent for October settlement decreased by $0.38 to $59.92 a barrel on the London-based ICE
Futures Europe exchange. West Texas Intermediate for October delivery declined by $0.08 to $55.35 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 4.57 to WTI. Gasoil for September delivery fell by $7.00.
Today indexes are steady as the market expects that the Federal Reserve would signal an interest rate cut.
Expectations have been heavy since the start of the week that Powell’s speech at an economic conference in Jackson Hole, Wyoming on Aug.23 would provide clues on when the central bank would cut rates again after its 25-basis-point reduction in July. Powell is under pressure from President Donald Trump to announce a full percentage point cut in rates, or something as
substantial, to deliver a major boost to the markets.
There are still fears about slowing global economies and demand. At the same time oil indexes downside was limited on Aug.22 by data showing that business activity in the Eurozone unexpectedly picked up in August, giving crude traders momentum respite from economic worries that had pressured prices.
Also supporting the market was the expectation that OPEC will squeeze crude supply further to boost prices OPEC’s share of global oil supply had fallen to 30%, its lowest in a decade, but the cartel won’t be stampeded into changing output policy as a result.
Traders were worried on the prospects of global oil demand especially amid trade tensions between the U.S and China, the world’s two biggest economies and oil users. U.S. President Donald Trump on Aug.21 said he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned that his tariffs would reduce U.S. economic output by 0.3% in 2020.
Efforts by Saudi Arabia and its producer allies to boost prices by restraining supplies haven’t brought result in the face of surging output from American shale fields. The drop in U.S. crude inventories last week was overshadowed by a 2.61 million-barrel increase in stored supplies of diesel and other distillates, heightening demand concerns.
Meanwhile, oil markets found some support from the simmering tensions between U.S. and Iran, after Iranian President Hassan Rouhani said if Iran’s oil exports are cut to zero, international waterways will not have the same security as before.
Expect bunker prices to demonstrate downward changes today: about 1-3 USD down for IFO, about 5-7 USD down for MGO.