MABUX: Bunker market this morning, Dec 15

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO in the main world hubs) changed irregular on December 14:
380 HSFO: USD/MT 335.19 (+0.04)
VLSFO: USD/MT 414.00 (+1.00)
MGO: USD/MT 475.64 (-0.19)

Market Bunker Prices Index (MBP) vs MABUX Digital Bunker Prices Index  (DBP) in the four world largest hubs showed that on December 14, the values of both 380 HSFO MBP and DBP fuel Indices in all selected ports, with the exception of Houston , have narrowed. Fuel oil was undervalued in Rotterdam (minus 6 USD) and Fujairah (minus 1 USD), in Singapore it was overvalued by 5 USD and in Houston – by 27 USD. At the same time, VLSFO fuel remains moderately overpriced in all four hubs. The MGO LS, in turn, was undervalued in all ports ranging from minus 15 USD to minus 40 USD except Houston (was overvalued by 12 USD).

World oil indexes changed irregular on Dec.14 amid hopes that a rollout of coronavirus vaccines will lift global fuel demand.

Brent for February settlement rose by $0.32 to $50.29 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January delivery increased by $0.42 to $46.99 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.30 to WTI. Gasoil for January delivery lost $1.50 – $410.50.

Today morning oil indexes do not have any firm trend so far: Brent and WTI are sliding down while Gasoil ARA is rising slightly.

The United States has started its vaccination campaign against COVID-19, lifting hopes that pandemic restrictions could end soon and lift demand in the world’s largest oil consumer. Meantime, major European countries continued in lockdown mode to curb the spread of COVID-19. Germany, the fourth largest economy in the world, plans to impose a stricter lockdown from Dec. 17 to battle the virus.

S&P Global Platts said, global oil demand will rise in 2021, but not enough to surpass 2019 levels as the coronavirus pandemic continues to weigh on transportation fuel demand, especially jet fuel. Platts expects global supply to increase by more than 3 million bpd in 2021, after declining about 7 million bpd in 2020, with the gains mostly coming from the Middle East and Russia. Saudi Arabian output is expected to rise by 800,000 bpd to reach 10.8 million bpd by year end. Russian output is forecast to grow 400,000 bpd, while output from Iraq, UAE and Kuwait is expected to grow a combined 1.2 million bpd. Libyan production is expected to rise by 700,000 bpd.

Iran is going to sell as much as 2.3 million barrels per day (bpd) of oil in the next Iranian year that begins in March 2021. Iran last exported that much oil in the early spring of 2018, before U.S. President Donald Trump pulled the United States out the so-called Iranian nuclear deal, and introduced sanctions on Iran’s oil, shipping, and banking industries. Since the U.S. sanctions were imposed, Iran has been using various tactics to ship crude abroad without being detected, including by tankers switching off transponders or documents stating the oil does not originate from Iran.

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

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Tags: Bunker market