MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO (Gasoil) in the main world hubs demonstrated slight irregular changes on Aug. 12:
380 HSFO – USD/MT – 305.69 (-0.70)
VLSFO – USD/MT – 364.00 (0.00)
MGO – USD/MT – 445.27 (+1.51)
Meantime, world oil indexes demonstrated increased on Aug. 12 after an industry report showed U.S. crude inventories last week fell more than expected, bolstering hopes that fuel demand in the world’s biggest economy can outlive the coronavirus pandemic.
Brent for October settlement increased by $0.93 to $45.43 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for September rose by $1.06 to $42.67 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.76 to WTI. Gasoil for September delivery added $2.25.
Today morning oil indexes slide down.
According to the Energy Information Administration (EIA), U.S. crude oil, gasoline and distillate inventories fell last week as refiners ramped up production and demand improved. Crude inventories fell by 4.5 million barrels, compared to expectations for a 2.9 million-barrel drop. That’s less than the 7.4 million barrel draw seen last week but that happened as the numbers could understated actual demand from end users: as much as over 2 million barrels of crude was shifted from the Strategic Petroleum Reserve to commercial stocks last week.
U.S. fuel demand rose to 19.37 million barrels per day last week, the highest since March, while crude output fell to 10.7 million barrels per day (bpd) from 11 million bpd. Gasoline demand climbed back to where it was just before the coronavirus forced people inside, while U.S. refineries raised operating rates to above 80% for the first time since March.
The EIA’s downward revision on Aug.11 to a key U.S. oil production forecast for this year also supported prices. U.S. crude production is forecast to fall by 990,000 bpd this year to 11.26 million bpd, steeper than the 600,000 bpd decline it forecast last month. EIA raised its 2021 outlook for US production by 130,000 b/d to an average 11.14 million b/d, with production rising slowly but steadily to end the year at 11.5 million b/d.
Capping gains, the OPEC said in a monthly report that world oil demand will fall by 9.06 million bpd this year, more than the 8.95 million bpd decline expected a month ago. Demand in 2021 is expected to rise by 7 million barrels a day, unchanged from its July forecast. At the same time, it also expects global supply from outside OPEC to increase between now and the year-end.
Increasing uncertainty over a stalemate in Washington on a stimulus package to support recovery from the deepest impact of the coronavirus pandemic also weigh on prices. Republican and Democratic negotiators heaped blame on each other on Wednesday, with Republicans refusing to negotiate their initial $1 trillion offer.
We expect bunker prices may demonstrate upward changes today: 3-5 USD up for IFO and 1-3 USD up for MGO.