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MABUX: Bunker market this morning, Mar.15.

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 Mar.14:

380 HSFO – USD/MT – 425.07(+3.71)
180 HSFO – USD/MT – 472.14(+2.85)
MGO – USD/MT – 640.57(-0.14)

Meantime, world oil indexes were mixed on Mar.14, as OPEC stressed the need to extend its production cut program past June while lowering its forecast for crude demand.

Brent for May settlement decreased by $0.32 to $67.23 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for April delivery rose by $0.35 to $58.61 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 8.62 to WTI. Gasoil for April delivery gained $1.50.

Today morning oil indexes were stable, propped up by production cuts led by OPEC and as U.S. sanctions against Venezuela.

OPEC cut the forecast of demand for its crude this year and predicted strong growth in non-OPEC supply.

Meantime, the NOPEC bill, which would allow the U.S. government to sue OPEC members for antitrust violations, is working its way through Congress. The Trump administration is reportedly divided on the issue and so far has not taken a position. But if president Trump supports it, the bill has a high chance of passing.

Earlier this week, U.S Secretary of State Mike Pompeo accused Rosneft of defying U.S. sanctions against Caracas by continuing to buy crude oil from PDVSA, which is its joint venture partner in a local operation. The Russian company responded by saying it was engaged in business and not politics, adding its contracts for the purchase of Venezuelan crude were signed before the sanctions against PDVSA were enforced. What’s more, Rosneft said it will evaluate the consequences of Pompeo’s statement and would defend its rights if it finds these have been adverse. The news have rendered some support to the fuel indexes.

American officials also are pressuring India to stop importing oil from Venezuela. The U.S. has sent signals that it is considering secondary sanctions, in which it would target foreign banks who do business with Venezuela.

The United States aims to cut Iran’s crude exports by about 20 percent to below 1 million barrels per day (bpd) from May by requiring importing countries to reduce purchases to avoid U.S. sanctions. Meantime, the United States will likely renew waivers to sanctions for most countries buying Iranian crude, including the biggest buyers China and India, in exchange for pledges to cut combined imports to below 1 million bpd. That would be around 250,000 bpd below Iran’s current exports of 1.25 million bpd. Washington may also deny extension requests made by Italy, Greece and Taiwan – in part because they have not made full use of their waivers so far. U.S. sanctions against Iran are still one of the main upward drivers in global fuel market.

U.S. crude oil inventories fell unexpectedly last week by 3.86 million barrels. That was compared to forecasts for a stockpile build of 2.66 million barrels, after a surge of 7.07 million barrels in the previous week. U.S. crude oil production also dipped, falling by 100,000 bpd to 12 million bpd.

A UN Panel of Experts reported that North Korea is using increasingly advanced and inventive techniques to evade the oil sanctions, including manipulation of vessel AIS transmission systems, physical disguise of tankers, illegal name-changing and other forms of identity fraud, night transfers, and the use of additional vessels for transhipment. These violations render the latest United Nations sanctions ineffective by flouting the caps on the import of petroleum products and crude oil by the DPRK as well as the coal ban, imposed in 2017 by the Security Council in response to the country’s nuclear and ballistic missile testing.

Chinese refineries processed 102.49 million tons of crude oil during the first two months of the year, up 6.1 percent on the year. This translated into 12.68 million bpd, which was the highest on record. Most of this crude oil, based on import figures, came from abroad. February marked the fourth month in a row of crude oil imports into the country exceeding the 10-million-bpd mark. It is expected, that some 890,000 bpd in new refining capacity will come on stream in China. As a result, it’s reasonable to expect an even worse glut, especially as the new emission rules of the International Maritime Organization enter into effect next year, hitting demand for high-sulfur bunkering.

We don’t expect bunker prices will have any firm trend today. Insignificant and irregular changes in a range of plus-minus 2-4 USD may prevail.
Source: Marine Bunker Exchange

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