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.24:
380 HSFO – USD/MT – 309.58 (+0.21)
VLSFO – USD/MT – 361.00 (-3.00)
MGO – USD/MT – 440.64 (-2.60)
Meantime, world oil indexes increased on Aug. 24 as risk assets in general rose in response to evidence of a continued fall in coronavirus cases in the U.S. Fears of an extended shortfall in supply due to the incipient hurricane season also supported product prices in particular.
Brent for October settlement increased by $0.78 to $45.13 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for October rose by $0.28 to $42.62 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.51 to WTI. Gasoil for September delivery added $10.75.
Today morning oil indexes are mixed amid massive production cuts in the U.S. Gulf Coast from Tropical Storms Marco and Laura from one side and rising coronavirus cases in Asia and Europe from another.
Data at the weekend from Johns Hopkins showed the number of new Covid-19 infections fell to its lowest level in two months on Sunday, at only 34,567. Infections had peaked in late June at over twice that level. Oil prices got some support on August 24 after the U.S. president Donald Trump announced an emergency authorization for convalescent plasma to help in treating coronavirus patients. One federal agency of the US Department of Health and Human Services, the Food and Drug Administration (FDA) has given a green light to the emergency use of antibody-rich blood plasma from COVID-19 survivors to treat other patients. The announcement was made by President Trump who is striving to find a cure before the November US presidential elections to support his bid for a second term. At the same time, a top U.S. infectious diseases expert warned on Aug.24 that rushing out vaccines could undermine trials of other promising candidates.
Europe is also seeing a rise in coronavirus cases while the first documented case of human re-infection with COVID-19 was reported with a man in Hong Kong catching the virus again some four months after first being infected.
Energy companies moved to cut production at U.S. Gulf Coast oil refineries on Aug.24 after shutting 82% of the area’s offshore crude oil output as the rare double-storm assault on key U.S. oil regions threatens to bring days of heavy rains and strong winds this week. Producers have shut more than 1.5 million barrels per day of Gulf Coast offshore oil production, nearly 14% of the nation’s total output as the twin threats of Hurricane Marco and Tropical Storm Laura approached. The National Hurricane Center warned that while Marco had weakened to a tropical storm, it still posed a threat to parts of the Gulf Coast. Tropical Storm Laura is still located over Cuba and not expected to make landfall on the U.S. until later in the week.
Motiva, the Saudi Aramco subsidiary that owns the biggest crude refinery in the U.S. at Port Arthur in Texas, may also shut the refinery later this week. Port Arthur is capable of processing over 600,000 barrels of oil a day. It was shut down nearly completely for two whole weeks in 2017 as a result of flooding from Hurricane Harvey.
This year’s hurricane season has been complicated by the coronavirus pandemic, forcing many people to weigh the risks of leaving their homes and potentially exposing themselves to the virus.
Elsewhere, the slim chance of a quick return of Libyan crude oil to world markets effectively vanished on Aug.24 as the Libyan National Army under warlord Khalifa Haftar rejected a ceasefire proposal from the UN-backed Government of National Accord. Haftar’s forces had initially been non-committal about the proposal last week, sparking hopes of an end to the 16-month battle for control of Tripoli, the Libyan capital.
China said on Aug.25 it agreed with the United States to continue pushing forward the implementation of the bilateral Phase 1 trade deal reached earlier this year during a call between the two countries’ top trade negotiators.
We expect bunker prices may demonstrate upward changes today: 3-5 USD up for IFO and 6-10 USD up for MGO.