MABUX: Bunker market this morning, Nov.24.
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO (Gasoil) in the main world hubs) demonstrated slight irregular changes yesterday:
380 HSFO - USD/MT 360,21 (+1.57)
180 HSFO - USD/MT 401,50 (+0.50)
MGO - USD/MT 590,26 (-1.64)
At the same time World oil indexes demonstrated slight upward evolution.
Brent for January settlement rose by $0.23 to $63.55 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January delivery increased by $0,53 to $58,55 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $5,00 to WTI. Gasoil for December delivery rose by $2.25.
Crude prices rose after the EIA report on Nov.22. Crude oil inventories fell by 1.9 million barrels last week, marking the first decline in three weeks (the forecast was for a decline of 1.5 million barrels).
Prices received additional support from growing signals that the Organization of Petroleum Exporting Countries (OPEC) and its allies will agree to prolong supply curbs beyond March when producers meet in Vienna next week. Top crude exporter Saudi Arabia is lobbying oil ministers to agree next week on a nine-month extension to OPEC-led supply cuts . Energy minister Khalid al-Falih said, that targets to reduce global oil surplus would not be reached to March 2018. This also suggests, that oil cut agreement needs to be extended.
Besides, the agenda for the OPEC meeting was published yesterday and in fact it will be only a 3-hour meeting. That suggests that a broad consensus has been built and the meeting is really just a formality to agree the extension of the Saudis’ favored 9-month extension period.
Today morning fuel indexes demonstrate slight irregular changes with no firm trend so far.
The fuel indexes are supported by the news that the Keystone pipeline might not restart for several weeks. The Keystone pipeline ruptured and spilled more than 200,000 gallons of crude oil in South Dakota last week. This will accelerate the inventory drawdowns in the U.S. as refiners lean more on storage. The outage could cut shipments to the U.S. by about 7 million barrels through November, a figure that would obviously grow if the outage lasts longer than expected. The news also pushed WTI futures into a state of backwardation (near-term oil futures trade at a premium to longer-dated contracts), which tends to be a sign of a tighter oil and fuel market.
Meantime, the number of oil and gas rigs in the United States rose again this week and brings the total gained in November to 10-the first monthly gain since July. The number of active oil rigs increased by 9. The total oil and gas rig count in the United States now stands at 923 rigs, up 330 rigs from a year ago-a 55 percent increase. The number of oil rigs stands at 747 versus 474 a year ago (+57 percent). Along with an increase to the number of active oil rigs, US crude oil production was up for the week ending November 17 at 9.648 million barrels per day-another new high for 2017 as new highs are seemingly reached each week.
We don’t expect any drastic changes in bunker prices’ dynamics today. Most probably the indexes may rise by 1-3 dollar.