MABUX: Bunker market this morning, Jun. 29

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO (Gasoil) in the main world hubs increased on Jun. 26:

380 HSFO – USD/MT – 287.99 (+1.92)
VLSFO – USD/MT – 344.00 (+3.00)
MGO – USD/MT – 419.12 (+0.06)

Meantime, world oil indexes demonstrated downward changes on Jun. 26 on fears of more economic disruptions as Covid-19’s rampage continues to devastate the United States and the world.

Brent for August settlement decreased by $0.03 to $41.02 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for August fell by $0.23 to $38.49 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.53 to WTI. Gasoil for July delivery fell by $5.50.

Today morning oil indexes continue to decline as coronavirus cases rose in the United States and other places, leading countries to resume partial lockdowns that could hurt fuel demand.

The new wave of coronavirus infections across the U.S. casts a new shadow over the outlook for demand in California, Texas and Florida, three of the most economically important U.S. states. Those states represent three of the four biggest regional centers of demand for motor fuel. Texas and Florida were both forced to suspend their plans for reopening their state economies on Jun.25 as the level of new Covid-19 infections hit a record. The United States reported more than 41,000 new cases on Jun.25, the second consecutive day with a record total, with health officials saying the true national caseload was probably 10 times the official count. These come as more than 2.4 million Americans have already been infected, with the death toll breaching 123,000.

Global coronavirus cases exceeded 10 million on Sunday as India and Brazil battled outbreaks of over 10,000 cases daily. New outbreaks are reported in countries including China, New Zealand and Australia, prompting governments to impose restrictions again.

Despite efforts by OPEC+ to reduce supplies, crude inventories in the United States, the world’s largest oil producer and consumer, have hit all-time highs. Moreover, the U.S. crude output was estimated at 11 million barrels per day for the week ended June 19, versus 10.5 million bpd in the previous week. It was the first rise in U.S. production in 13 weeks. According to Baker Hughes, the number of active rigs in the United States decreased by 1 to 265 this week, down by 702 year on year. The number of active oil rigs reduced by 1 to 188. At the same time, there are fears, that higher oil prices are prompting some producers to resume drilling.

Elsewhere, U.S. shale oil pioneer Chesapeake Energy Corp filed for bankruptcy protection on Jun.28 as it bowed to heavy debts and the impact of coronavirus outbreak on energy markets.

As China imported its highest-ever volume of crude oil in May, its imports from the world’s top oil exporter, Saudi Arabia, nearly doubled to the highest on record after fuel demand recovered and refiners purchased crude at bargain prices in April. Chinese imports of crude oil from Saudi Arabia surged by 94.9 percent on the year and by 71 percent on the month in May, to reach 2.16 million barrels per day (bpd). Total crude oil imports into China surged to an all-time high of 11.34 million bpd in May. China smashed its crude oil imports record as manufacturing activity picked up and lockdowns eased. But refiners also took advantage of the cheapest crude in years in April to snap up cargoes for delivery in the following months. China didn’t import any oil from Venezuela in May, according to its customs data, while shipments from Iran also plummeted as buyers are steering clear of U.S. sanctions. Yet, shipping data suggests that China continues to receive crude from Venezuela, mostly through ship-to-ship transfers.

We expect bunker prices may slightly decline today: 1-3 USD down for IFO, 3-5 USD down for MGO.
Source: MABUX