MABUX: Bunker Market this morning June, 28
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) continued upward changes on June. 27
380 HSFO – USD/MT 416.15 (+6.75)
180 HSFO – USD/MT 454.75 (+6.9)
MGO – USD/MT 658.90 (+6.09)
Meantime, world oil indexes o demonstrated irregular changes on June. 27 as market remained wary of the outcomes of meetings that Xi, Putin and Salman have with U.S. President Donald Trump at the G20 summit in Osaka, Japan, beginning today.
Brent for August settlement increased by $0.06 to $66.55 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for August delivery rose by $0.05 to $59.43 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 7.12 to WTI. Gasoil for July delivery declined by $5.25.
Today indexes fall as market await the G20 summit in Japan and a meeting of OPEC and other oil producers to decide on an extension of output cuts.
Today G20 meeting begins.
U.S. President Donald Trump and president of Russia Vladimir Putin are to meet in Osaka on today. Trump also has meetings with Saudi Prince Salman ad president of China Xi on June, 29.
Some say, that the likely leverage the U.S. president has over the Saudis, who want higher security for oil tankers in the Persian Gulf after a spate of attacks over the last month blamed on Iran. Tehran, locked in an escalating battle of words with the U.S. over sanctions on its oil, has denied responsibility for the attacks. Last week, it shot down a U.S. surveillance drone, worsening its conflict with Washington, as it refused to renegotiate a nuclear deal with Trump. With U.S. gasoline prices on the rise, when Trump meets the Saudi crown prince, he will likely ask again for higher supplies of oil as the U.S. pays for security of tankers in the Strait of Hormuz.
As to U.S. – China talks, Trump has been sending out mixed signals on the likely outcome of the talks with the Chinese leader from the time he tweeted a week ago that he had a very good phone call with Xi as they agreed on the Osaka meeting. Trump also said on June,26 that a trade deal with China was possible, but added that he was happy with the way things were and was still considering more tariffs on Beijing. He said all these even as U.S. Treasury Secretary Steve Mnuchin kept insisting the two countries were 90% of the way toward a trade deal. At the same time, White House economic advisor Larry Kudlow said on June,27 the U.S. could still move forward with increased tariffs on Chinese goods, further clouding the trade picture.
Meanwhile, The Organization of Petroleum Exporting Countries (OPEC) and some non-members will meet early next week to discuss extending production cuts that have been in place since January 1.
Russia will have to decide by next week on Russia’s cooperation with Saudi Arabia in extending oil production cuts under their OPEC+ pact. The Saudi-led OPEC meets on July,1 among its 14 members and a day later with the group of 10 oil-producing allies led by Russia to talk about extending supply cuts that had been on since December. If OPEC+ pushes for cuts till the end of the year, that could heighten the rally in oil and work against U.S., who wants both crude and pump prices of gasoline to remain low as he campaigns for reelection in 2020.
Expect bunker prices to demonstrate irregular changes today: plus/minus 2 USD for IFO, 3-5 USD down for MGO.