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MABUX: Bunker market this morning, Sep.25

Friday, 25 September 2020 | 11:00

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO (Gasoil) in the main world hubs) changed insignificant on Sep.24:

380 HSFO – USD/MT – 290.81 (-2.79)
VLSFO – USD/MT – 339.00 (0.00)
MGO – USD/MT – 405.14 (-1.15)

Meantime, world oil indexes changed irregular on Sep.24 amid a stronger dollar and a renewed wave of COVID-19 cases in Europe that led to renewed travel restrictions in several countries.

Brent for November settlement increased by $0.17 to $41.94 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for November delivery rose by $0.38 to $40.31 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $1.63 to WTI. Gasoil for October delivery lost $5.00 – $320.75.

Today morning oil indexes have turned into slight upward evolution.

Prices slipped down after data showed U.S. business activity slowed in September, U.S. Federal Reserve officials flagged concerns about a stalling recovery, and Britain, Germany and France imposed restrictions to stem new coronavirus infections — all factors affecting the fuel demand outlook. Still, fuel demand in the U.S. remains subdued as the pandemic limits travel. The four-week average of gasoline demand was 8.5 million barrels per day (bpd) last week, down 9% from a year earlier.

Russia’s Gazprom Neft believes that global oil demand will return to its pre-pandemic levels in the second half of 2021. As per statement, many countries are either expecting or facing a second wave, but it is expected that very harsh quarantine measures, like the ones earlier this year especially in Europe, will not be re-imposed. Last week, the IEA cut its forecast for global oil demand this year, expecting demand to fall by 8.4 million bpd from 2019.

Saudi Arabia’s domestic crude oil stockpiles have climbed to the highest since the coronavirus pandemic hit the market hardest in April: 78 million barrels as of Sept. 23, the highest since April 26. The kingdom’s crude stockpiles are climbing because of weak refining margins, relatively high official selling prices for September cargoes and shrinking domestic consumption. Maintenance at the Ras Tanura refinery also boosted inventories.

After Iran delivered condensate to Venezuela via an Iran-flagged tanker, the same tanker is now loading Venezuelan crude oil at a terminal in the Latin American country, in defiance of the U.S. sanctions on both countries’ oil industries and exports. Lack of diluents, lack of maintenance, lack of money, and lack of spare parts have forced Venezuela’s refineries to operate at very low processing rates. Iran, as a fellow target of U.S. sanctions, has declared its readiness to help Venezuela deal with the shortage. It has sent professionals to help Venezuela repair its refineries and it is now sending to Venezuela the superlight crude grade known as condensate to blend it with the heavy crude and produce exportable grades of crude oil.

An increase in short-term period chartering of VLCCs in the first half of September has increased market speculation about another surge in floating storage of crude oil. With a sharp decline in freight rates, several charterers have reportedly taken VLCCs for short-term time charter ranging from three to nine months. As charter rates have declined, any possible deepening in the crude price contango would provide a profitable floating storage opportunity to charterers.

We expect IFO bunker prices may add 1-3 USD while MGO prices will change irregular in a range of plus-minus 3-5 USD.
Source: MABUX

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