MABUX: Bunker market this morning, Sept 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) declined on September 09:
380 HSFO: USD/MT 290.52 (-9.42)
VLSFO: USD/MT 334.00 (-9.00)
MGO: USD/MT 409.06 (-12.69)
Meantime, world oil indexes increased on Sep.09 as buyers returned to a market that was the pressured since last week by worries of weak demand for fuel after the end of the U.S. summer driving season.
Brent for November settlement decreased by $1.01 to $40.79 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for October rose by $1.29 to $38.05 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.74 to WTI. Gasoil for September delivery added $7.75.
Today morning oil indexes decline on worries about fuel demand after data showed U.S. crude stockpiles rose last week. Moreover, COVID-19 cases continue to rise around the world
According to the American Petroleum Institute, U.S. crude stockpiles rose by 2.97 million barrels last week as coronavirus case surged in several U.S. states. That compared with forecasts of a draw of 1.4 million barrels. The U.S. Energy Information Administration will release official weekly inventory data later today, a day later than normal following the U.S. Labor Day holiday.
According to trading sources and shipping data leading commodity traders are booking tankers to store crude oil and diesel on the water, with supply outpacing consumption.
The rising stockpiles come ahead of a meeting on Sept. 17 of the market monitoring panel of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, which in August trimmed supply curbs from earlier this year on expectations demand would improve. Record supply cuts by the OPEC+ have helped support prices, but with grim economic figures being reported almost daily, the outlook for demand for oil remains bleak.
China's factory gate prices fell for a seventh straight month in August although at the slowest annual pace since March, suggesting industries in the world's second-biggest economy continued their recovery from the coronavirus-induced downturn.
On Sep.8 Saudi Arabia cut its official selling price (OSP) for October to two of its largest buyers, Asian and U.S. refineries, and after one of the most promising Covid-19 vaccine trials was put on hold due to an adverse reaction. That is bad for oil demand, which is counting on lockdowns being lifted and businesses opening in order to see a full recovery.
The global health crisis continues to flare with coronavirus cases rising in India, Great Britain, Spain and several parts of the United States. The outbreaks are threatening to slow a global economic recovery and reduce demand for fuels from aviation gas to diesel.
The Energy Information Administration (EIA) on Sep.8 once again lowered its oil demand growth forecast by another 210,000 barrels per day, for a total annual decline of 8.32 million bpd for this year. The EIA lowered its global oil demand growth forecast for next year as well, by another 490,000 bpd. The EIA is also expected that U.S. oil production will not fall as far as originally thought this year.
At the same time, Morgan Stanley raised its Brent price forecast slightly higher to $50 a barrel for the second half of 2021 with the dollar weakening and rising inflation expectations.
We expect bunker prices may increase today: 5-7 USD up for IFO and 5-7 USD up for MGO.
