MABUX: Bunker market this morning, Dec 16
The Bunker Review was contributed by Marine Bunker Exchange (MABUX)
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) increased on December 13.
380 HSFO: USD/MT – 359.26 (+6.55)
180 HSFO: USD/MT – 400.38 (+6.15)
MGO: USD/MT – 672.15 (+5.40)
Meantime, world oil indexes increased on Dec.13 amid progress in resolving the U.S.-China trade dispute and a decisive general election result in Britain.
Brent for February settlement increased by $1.02 to $65.22 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January rose by 0.89 to $60.07 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $5.15 to WTI. Gasoil for January delivery added $8.25.
Today morning oil indexes continue to turned into the downward direction as the market searched for clarity beyond the initial impact of a trade deal between the United States and China that's expected to boost flows between the top two global economies
Washington and Beijing announced a “Phase one” agreement that reduces some U.S. tariffs in exchange for increased Chinese purchases of American farm goods. The agreement averted additional tariffs on Chinese goods totaling $160 billion that the United States was set to impose over the weekend, but investors remained cautious as they awaited precise details of how the trade deal would work.
U.S. Trade Representative Robert Lighthizer told on Dec. 13, that China has agreed to buy $32 billion of additional U.S. farm products over two years as part of a phase one trade pact. He said that the deal is "totally done" despite the need for translation and revisions to its text. He also added, it would be signed the first week of January. Chinese officials, however, offered no specifics on the amount of U.S. agricultural goods Beijing agreed to buy, a sticking point in negotiations to end the 17-month trade war between the world’s two largest economies. At the same time, the market needs some clarity around exactly what the deal entails.
Britain’s ruling Conservative Party won a large majority in Thursday’s (Dec.12) general election, paving the way for Prime Minister Boris Johnson to remove the country from the European Union. Uncertainty about Brexit had also weighed on oil prices.
Oil demand growth will likely rebound along with a rebound in global manufacturing.
Data from China today that showed industrial output and retail sales growth accelerating more than expected in November offered some support for oil prices. However, investors remained cautious as growth in China is expected to slow further next year, with the government likely to set its economic growth target at around 6% in 2020 compared with this year's 6-6.5%.
Oil indexes are also supported by efforts by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia to cut production. OPEC+, has agreed to lower supply a further 500,000 barrels per day as of Jan. 1, which could boost oil prices.
According to energy services firm Baker Hughes Co U.S. energy firms added rigs for the first time in eight weeks even as producers follow through on plans to reduce spending on new drilling. Companies added 4 oil rigs in the week to Dec. 13, bringing the total count to 667.In the same week a year ago, there were 873 active rigs. That keeps the oil rig count on track to fall for the first year since 2016. The decline, however, only totals 218, which is much smaller than 2015’s record 963 rig decline. The oil rig count, an early indicator of future output, has already declined for a record 12 months in a row as independent exploration and production companies cut spending on new drilling as shareholders seek better returns in a low energy price environment.
We expect bunker prices to rise today: 2-4 USD up for IFO, 6-8 USD up for MGO.
