Bunker market this morning, Mar.17, 2021
By Sergey Ivanov, Director, MABUX
MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO in the main world hubs) continued slight downward movement on Mar.16:
380 HSFO - USD/MT – 433.37 (-1.71)
VLSFO - USD/MT – 536.80 (-3.09)
MGO - USD/MT – 607.27 (-3.34)
As of March 16, 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 remained undervalued in all selected ports ranging from minus $ 4 (Houston) to minus $ 24 (Rotterdam and Singapore). Two ports, according to DBP Index, showed an underestimation of VLSFO fuel: minus $ 13 in Rotterdam and minus $ 27 in Singapore. In Fujairah, MBP and DBP indices were correlated 100%. Houston recorded a VLSFO overvaluation by plus $ 26. MGO LS, according to DBP Index, remained undercharged in two selected ports: minus $ 41 in Rotterdam and minus $ 40 in Singapore. In Fujairah, DBP Index registered an overpricing of MGO LS by $ 4, and in Houston - by $ 16.
World oil indexes fell on Mar.16, as rising stockpiles in the United States added to the risks to a demand recovery after countries including Germany and France halted COVID-19 vaccinations.
Brent for May settlement fell by $0.49 to $68.39 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for April delivery decreased by $0.59 to $64.80 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.59 to WTI. Gasoil for April delivery lost $5.50 – $538.50.
Today morning oil indexes show slight upward evolution.
Germany, France, Italy and Sweden plan to suspend AstraZeneca COVID-19 injections after reports of possible serious side effects, although the World Health Organization said there was no established link to the vaccine. These moves are deepening concerns about a slow pace of vaccinations in the European Union, which may delay any economic recovery from the pandemic, pushing fuel indexes down.
Trade data from the American Petroleum Institute showed U.S. crude stockpiles fell by about 1 million barrels last week. Ahead of official data on Mar.17, analysts forecast a crude build of about 3 million barrels in a fourth straight weekly rise. Stocks jumped by nearly 14 million barrels in the previous week. U.S. refiners are scaling back on hiring ships for longer periods, another sign of uncertainty over when global oil demand will return to pre-pandemic levels.
U.S. exports of liquefied natural gas to Asia surged by 67 percent in 2020 as total LNG exports out of the United States jumped by 32 percent despite the record-low demand and prices last summer due to the pandemic. The key driver of the surge in U.S. exports to Asia was China, which significantly boosted its imports of American LNG after lowering its tariffs on imports of U.S. LNG to 10 percent from 25 percent. India and Japan also boosted imports of U.S. LNG. U.S. LNG exports to Europe also rose last year by 0.6 Bcf/d to average 2.5 Bcf/d. Exports increased to Turkey, the UK, Spain, Greece, and Lithuania.
We expect bunker prices for 380 HSFO and VLSFO may lose today 2-4 USD, while MGO prices may also fall by 3-5 USD.
