MABUX: Bunker Market this morning July, 01
The Bunker Review was contributed by Marine Bunker Exchange
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. 28
380 HSFO - USD/MT 418.12 (+1.97)
180 HSFO - USD/MT 456.25 (+1.50)
MGO - USD/MT 660.10 (+1.20)
Meantime, world oil indexes demonstrated irregular changes on June. 28.
Brent for September settlement declined by $0.93 to $64.74 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for August delivery fell by $0.96 to $58.47 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of 8.08 to WTI. Gasoil for July delivery increased by $1.00.
Today indexes rise after Saudi Arabia, Russia and Iraq backed an extension of supply cuts for another six to nine months ahead of an OPEC meeting in Vienna.
OPEC and its allies look set to extend oil supply cuts until the end of 2019 after top producers on June,30 endorsed a policy aimed at propping up the price of crude. Russian President Vladimir Putin said on June,30, that Russia has agreed with Saudi Arabia to extend by six to nine months a deal with OPEC on reducing oil output, as oil prices come under renewed pressure from rising U.S. supplies and a slowing global economy. Saudi Energy Minister Khalid al-Falih said on Sunday that the deal would most likely be extended by nine months and no deeper reductions were needed. The Organization of the Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, meet on July 1-2 to discuss the deal, which involves curbing oil output by 1.2 million barrels per day (bpd). The United States, the world's largest oil producer ahead of Russia and Saudi Arabia, is not participating in the pact.
A nine-month extension would mean the deal runs out in March 2020. Russia's consent means the OPEC+ group may have a smooth meeting if OPEC's third-largest producer Iran also endorses the arrangement. New U.S. sanctions on Iran have reduced its exports to a trickle as Washington seeks to change what it calls a corrupt regime in Tehran. Iran has denounced the sanctions as illegal and says the White House is run by mentally retarded people.
The U.S.-Iran standoff and shrinking American crude stockpiles propelled oil to its biggest monthly gain since January. EU said a workaround to Iran sanctions was in operation. An Iranian official told reporters ahead of the meeting that his country's main demand was to sell its oil at the same levels that it did before Washington withdrew from the accord. However, he cautioned that Tehran had lost patience with the European signatories. Until its demand is met, Iran will continue on its current path and go over limits of the deal one by one, starting with the uranium enrichment level, the official said, although none of the actions are irreversible.
China's factory activity unexpectedly shrank in June as domestic and export demand faltered, a private sector business survey showed on july,1, pointing to further strains on its vast manufacturing sector as the Sino-U.S. trade war drags on. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) for June came in at 49.4, the worst reading since January and below economists' expectations of 50.0. It was the first time in four months that the keenly-watched index has fallen below the neutral 50-mark dividing expansion from contraction on a monthly basis.
However, leaders of the United States and China agreed at the G20 summit in Japan over the weekend to restart trade talks, giving the market some cause for optimism, though analysts say the lack of any substantive agreements from the meeting mean China's economic woes are likely to persist. However, the official China Daily, warned while there was now a greater likelihood of reaching an agreement, there's no guarantee there would be one. Even though Washington agreed to postpone levying additional tariffs on Chinese goods to make way for negotiations, and Trump even hinted at putting off decisions on Huawei until the end of negotiations, things are still very much up in the air.
Expect bunker prices to demonstrate irregular changes today: 3-5 USD down for IFO, 1-3 USD up for MGO.
