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MABUX: Bunker market this morning, Mar 15, 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) continued slight upward evolution on March 12:

380 HSFO: USD/MT – 434.31 (+3.17)
VLSFO: USD/MT – 540.36 (+4.93)
MGO: USD/MT – 608.60 (+6.81)

As of March 12, a correlation of MBP Index (Market Bunker Prices) vs DBP Index (Digital Bunker Prices = MABUX Digital Benchmark) in four largest global hubs showed that 380 HSFO fuel was undercharged in all selected ports ranging from minus $ 7 (Houston) to minus $ 33 (Rotterdam). DBP Index recorded an underestimation of VLSFO fuel in three selected ports: from minus $ 12 in Fujairah to minus $ 27 in Singapore. In Houston, there was still registered overpricing of VLSFO by $ 16. MGO LS, according to DBP Index, remained undercharged in only two selected ports: minus $ 36 in Rotterdam and minus $ 43 in Singapore, while in Fujairah MGO LS was overpriced by $ 4, and in Houston – by $ 6.

World oil indexes changed sideways on March 12, supported by production cuts by major oil producers and optimism about a demand recovery in the second half of the year.

Brent for May settlement fell by $0.41 to $69.22 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for April delivery decreased by $0.41 to $65.61 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.46 to WTI. Gasoil for April delivery gained $4.75 – $553.25.

Today morning oil indexes continue slight upward evolution.

The Organization of Petroleum Exporting Countries forecast a stronger oil demand recovery this year, weighted to the second half. OPEC cut its oil demand estimate for Q1 by 180,000 bpd, and for Q2 by 310,000 bpd compared to the February outlook. However, in the third quarter, OPEC now sees demand at 97.43 million bpd, up by 400,000 bpd compared to last month’s assessment. For the fourth quarter, global oil demand is expected at 98.91 million bpd, up by nearly 1 million bpd – 970,000 bpd – compared to the estimate in February. For the full year, OPEC expects oil demand to grow by 5.9 million bpd, up by 100,000 bpd compared with last month’s forecast.

The number of oil and gas rigs in the United States fell by 1 last week. The total number of active oil and gas rigs in the U.S. is now at 402—or 390 fewer than this time last year. The EIA’s estimate for oil production in the United States for the week ending March 5 rose by 900,000 bpd to 10.9 million barrels with higher oil prices and demand, enticing drillers to bring on more barrels.

JP Morgan forecasts sustained higher oil prices are expected to encourage U.S. producers to increase output, which could eventually weigh on prices. As per JP Morgan, U.S. oil output to average 11.36 million bpd this year compared with 11.32 million bpd in 2020.

We expect bunker prices for 380 HSFO and VLSFO may lose today 1-3 USD, while MGO prices may gain 2-4 USD.

 

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