MABUX: Bunker Market Review as of March 5
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) demonstrated slight irregular changes on March, 04
380 HSFO - USD/MT 420.14 (+2.07)
180 HSFO - USD/MT 466.43 (+1.57)
MGO - USD/MT 643.86 (-2.50)
Oil rises 1 percent yesterday on U.S.-China trade optimism, OPEC+ supply cuts
Oil prices rose about 1 percent on Monday as the United States and China appeared closer to ending a trade war that has slowed global economic growth while OPEC ally Russia said it would ramp up its crude supply cuts.
Gains were tempered by a drop in equity indexes, which weakened sentiment on oil markets.
Washington and Beijing were close to reaching a trade deal that would roll back U.S. tariffs on at least $200 billion worth of Chinese goods as China pledges to make structural economic changes and end retaliatory tariffs, a source briefed on negotiations said on Sunday.
Russia, the biggest non-member ally of the Organization of the Petroleum Exporting Countries, plans to speed up crude output cuts this month, Energy Minister Alexander Novak said.
OPEC and its partners, known as OPEC+, expected to extend supply cuts at its June meeting, but much depends on the extent of U.S. sanctions on OPEC members Iran and Venezuela, the sources said. Crude supply from OPEC hit a four-year low in February, a Reuters survey found, as top exporter Saudi Arabia reduced production more than it had agreed to, and as U.S. sanctions on Venezuelan oil took effect. The cuts have helped crude prices rally more than 20 percent so far this year despite surging U.S. production.
Market this morning Tuesday
Oil prices fell on Tuesday as China cut its 2019 economic growth target, dimming the outlook for fuel demand, although OPEC-led efforts to cut output still offered some support.
“Near term ... it is hard to get very bullish on oil prices. The market is still working off the surpluses built in H2 2018, keeping OECD commercial inventories stuck above the five-year average,” said energy analysts at economic research firm TS Lombard.
Oil demand growth has been flagging along with an economic slowdown, especially in Europe and Asia. China said on Tuesday it was targeting economic growth of 6.0 to 6.5 percent in 2019, down from the 6.6 percent growth reported last year, which was already the lowest in decades. Fuel efficiency is also improving, denting demand growth.
TRADE TALK HOPES
Optimism that the United States and China will soon end their bitter trade disputes has offered some support.
China’s Commerce Minister Zhong Shan said on Tuesday that trade talks with the United States have been difficult but that working teams from both countries are continuing with their negotiations.
To prop up the market, the Organization of the Petroleum Exporting Countries (OPEC) has led efforts since the start of the year to withhold around 1.2 million barrels per day (bpd) of supply.
The group was due to decide in April whether to continue withholding supply, but OPEC sources said this week a decision would likely be delayed until June, meaning cuts will continue at least until then.
Oil Future close 4th March:
Brent: $65.67(+0.60)pbr front month May
WTI: $56.59(+0.79)pbr front month April
MGO: $622.75(+8.25)/mton front month March
NY Harbor Ulsd: $620.12(+4.09)/mton
Oil Futures trading at GMT: 07.35; Brent: -27 cents, WTI: -29 cents
Expect bunker prices to increase, Fuel Oil 4-6 USD/mton, MGO +8 USD/mton and NY Harbor Ulsd +4 USD/mton.
