MABUX: Bunker market this morning, June, 05

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 June, 03:

380 HSFO – USD/MT – 273.89 (+0.21)
VLSFO – USD/MT – 314.00 (0.00)
MGO – USD/MT – 386.60 (-1.71)

Meantime, world oil indexes also demonstrated irregular changes on June, 04.

Brent for August settlement increased by $0.20 to $39.99 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for July rose by $0.12 to $37 .41 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.58 to WTI. Gasoil for June delivery lost $4.75.

Today morning oil indexes decline as uncertainty over OPEC production cuts grows.

OPEC+ will meet on Saturday, June 06 to discuss extending output cuts. There was an information earlier, that a ministerial video conference could be held this week, should Iraq and others agree to boost their adherence to existing supply cuts. OPEC had been expected to meet on June 4 to discuss it, but the meeting was delayed amid talks over poor compliance by some producers. Iraq and Nigeria, both laggards in previous OPEC+ cuts, have shown lower compliance with the curbs implemented since May than OPEC producers in the Gulf, such as Saudi Arabia. If OPEC+ fails to agree to roll over the current output curbs, that would mean the curbs could scale back to a cut of 7.7 million bpd from July through December as earlier agreed.

Saudi Aramco is set to delay its July crude official selling prices until at least June,07 pending the outcome of a meeting of OPEC+ producers. Saudi Aramco typically issues its official selling prices by the 5th of each month, setting the trend for Iranian, Kuwaiti and Iraqi prices and affecting more than 12 million barrels of oil per day bound for Asia.

The EIA reported that U.S. gasoline inventory rose 2.8 million barrels last week, versus analysts’ forecast a rise of just about 1 million barrels. Distillate stockpiles led by diesel, soared by 9.9 million barrels, compared with expectations for a build of about 2.7 million barrels. Distillate inventories alone have risen by more than 51 million barrels over the past eight weeks. U.S. crude production is down nearly 2 million barrels from record highs of 13.1 million barrels per day in mid-March. And domestic crude inventories did drop by an unexpected 2.1 million barrels last week. But that decline was also offset by a build of 4 million barrels on the Strategic Petroleum Reserve, which represents emergency crude supplies held by the government. The figures suggest that fuel consumption in the world’s largest oil consumer isn’t recovering as quickly as previously anticipated.

Also weighing on the price of crude is the ongoing spat between China and the U.S., with the latest manifestation of this being the ending of flights between the two countries, the world’s two biggest economies. China said it would ease coronavirus restrictions to allow in more foreign carriers, shortly after Washington said it planned to bar Chinese passenger airlines from flying to the United States by June 16 due to Beijing’s curbs on U.S. carriers. At the same time, the U.S. Transportation Department plans to issue a revised order in the coming days that is likely to allow some Chinese passenger airline flights to continue.

We expect bunker prices may demonstrate irregular changes today: 1-3 USD up for IFO, 3-5 USD down for MGO.
Source: MABUX

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