MABUX: Bunker market this morning, Feb 08, 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 Gasoil) in the main world hubs) demonstrated slight upward changes on February 5:

380 HSFO: USD/MT – 378.37 (+2.05)
VLSFO: USD/MT – 480.74 (+3.84)
MGO: USD/MT – 530.99 (+1.60)

Correlation between the Market Bunker Price Index (MBP) vs MABUX Digital Bunker Price Index (DBP) in four major hubs on Feb.05 showed undercharging of 380 HSFO bunker grades in all ports ranging from minus 8USD (Rotterdam and Fujairah) to minus 13USD (Houston). VLSFO is overcharged in all 4 hubs in a range of 8USD (Houston) – 15USD (Singapore). MGO LS undervalued in all four major hubs ranging from minus 1USD (Houston) to minus 25USD (Singapore).

Meantime, world oil indexes increased on Feb.05 supported by economic revival hopes and supply curbs by producer group OPEC and its allies.

Brent for April settlement increased by $0.50 to $59.34 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for March rose by $0.62 to $56.85 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.49 to WTI. Gasoil for February delivery added $12.00.

Today oil indexes continue to rise amid supply cuts by key producers and hopes for further U.S. stimulus measures.

Saudi Arabia’s pledge to implement further supply cuts in February and March, and reductions by other OPEC+ members is also helping to maintain the balance in global markets.

Despite the cuts, U.S. producers are increasing their output in order to take advantage of stronger crude oil prices. According to the energy services firm Baker Hughes Co., U.S. drillers last week added oil and natural gas rigs for an 11th week in a row for the first time since June 2017 as crude prices hit pre-pandemic highs. The U.S. oil and gas rig count, an early indicator of future output, rose by eight to 392 in the week to Feb. 5, the highest since May. Despite rising for six months in a row, that count is still 398 rigs, or 50%, below this time last year. U.S. oil rigs rose by four to 299 last week, also their highest since May, while gas rigs rose by four to 92, their highest since April.

However, COVID-19 lockdowns that are still in place across parts of Europe and Asia continue to dampen fuel demand.

We expect bunker prices may demonstrate upward changes today: 2-4 USD up for 380 HSFO, 5-8 USD up for MGO.

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Tags: MABUX, bunker fuel prices