MABUX: Bunker market this morning, Feb 10
The Bunker Review was contributed by Marine Bunker Exchange (MABUX)
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO (Gasoil) in the main world hubs demonstrated irregular changes on February 07:
380 HSFO: USD/MT 365.43 (+2.04)
VLSFO: USD/MT 558.00 (-1.00)
MGO: USD/MT 606.07 (-4.35)
Meantime, world oil indexes decreased on Feb. 07 after Russian Energy Minister Alexander Novak couldn’t give his assent to suggestions from OPEC’s suggestion that the group and its allies, which include Moscow, cut an additional 600,000 barrels per day in supply.
Brent for April settlement decreased by $0.46 to $54.47 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for March declined by $0.63 to $50.32 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $4.15 to WTI. Gasoil for February delivery fell by $2.50.
Today morning oil indexes continue downward trend on oversupply worries as virus hits China demand.
This week, a panel advising OPEC, suggested provisionally cutting output by 600,000 barrels per day (bpd). However, Russia Energy Minister Alexander Novak said Moscow needed more time to assess the situation. He predicted global oil demand may fall by 150,000 to 200,000 barrels per day (bpd) in 2020 in part because of the coronavirus. Despite Novak’s optimism about the current demand for oil, most analysts say refinery demand for crude and airlines’ consumption of jet fuel are falling by hundreds of thousands of barrels per day due to the impact of the coronavirus crisis. Producers in OPEC+ are scheduled to meet in Vienna on March 5-6, although the meeting could be brought forward because of concerns surrounding the virus.
Prices have fallen about a fifth since the outbreak of the virus in the Chinese city of Wuhan. China is the world’s biggest importer of crude, taking in roughly 10 million bpd in 2019. U.S. Energy Secretary Dan Brouillette said on Feb. 07 that the impact of the coronavirus outbreak on global energy markets is currently marginal, though it could worsen if the virus spreads. At the same time, Chinese policymakers are preparing measures, including more fiscal spending and interest rate cuts, amid expectations that the outbreak will have a devastating impact on first-quarter growth.
U.S. energy firms added oil rigs for the third time in four weeks even though producers planned to continue reducing spending on new drilling for a second consecutive year in 2020. According to Baker Hughes, companies added 1 oil rig last, bringing the total count to 676.
The U.S. Energy Information Administration projected crude output will rise about 9% in 2020 to 13.3 million barrels per day (bpd) and 3% in 2021 to 13.7 million bpd from a record 12.2 million bpd in 2019.
Libya’s oil production dropped to 181,576 barrels per day, NOC said on Feb.07. Oil output in Libya has been plunging since Jan. 18 due to a blockade of ports and fields by groups loyal to eastern-based commander Khalifa Haftar, falling to current levels from about 1.2 million bpd before the stoppage.
We expect bunker prices may decline today: US$ 1-3 down for IFO, US$ 1-3 down for MGO.
