MABUX: Bunker market this morning, Feb 05, 2021

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 in the main world hubs) rose on February 04:

380 HSFO: USD/MT – 376.32 (+5.02)
VLSFO: USD/MT – 476.90 (+4.46)
MGO: USD/MT – 529.39 (+3.21)

As of Feb. 04, correlation of MBP Index (Market Bunker Prices) vs DBP Index (MABUX Digital Benchmark (Digital Bunker Prices)) in four largest global hubs showed that the situation with underestimation of 380 HSFO and MGO LS fuel grades in all four selected ports has remained unchanged. According to DBP index, 380 HSFO was undercharged in a range of minus $ 4 (Fujairah) to minus $ 10 (Rotterdam). For MGO LS, its undercharge ranged from minus $ 4 (Houston) to minus $ 31 (Singapore), while VLSFO fuel remained overpriced in all selected ports ranging from plus $ 9 (Houston) to plus $ 12 (Singapore and Fujairah).

World oil indexes changed irregular on Feb.04: the OPEC+ alliance of producers stuck to its reduced output policy and U.S. crude stocks fell, with optimism over a new U.S. pandemic relief bill adding further price support.

Brent for April settlement rose by $0.38 to $58.84 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for March delivery increased by $0.54 to $56.23 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.61 to WTI. Gasoil for February delivery lost $1.75 – $475.50.

Today morning upward trend of oil indexes continues.

OPEC+ extended its oil supply pact at existing levels on Feb.03, suggesting that producers are happy the cuts are draining inventories while uncertainty remains over the outlook for a recovery in demand as the COVID-19 pandemic lingers. OPEC also expects output cuts to keep the market in deficit throughout 2021, even though the group reduced its demand forecast.

Fuel indexes were also supported by news that Democrats in the U.S. Congress took the first steps toward advancing President Joe Biden’s proposed $1.9 trillion coronavirus aid plan. The number of Americans filing new applications for unemployment benefits decreased last week, suggesting that the jobs market was stabilising as authorities start to loosen pandemic-related restrictions on businesses.

We expect IFO bunker prices may rise slightly today by 1-4 USD while MGO prices will change sideways: plus-minus 1-3 USD.