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MABUX: Bunker market this morning, Jan.09.

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 on Jan.08:

380 HSFO - USD/MT - 391.18(+1.07)

VLSFO - USD/MT – 666.00( 0.00)

MGO - USD/MT – 714.96 (-0.66)

Meantime, world oil indexes fell as President Donald Trump refrained from further military hostilities with Iran after Tehran attacked U.S. airbases.

Brent for March settlement decreased by $2.83 to $65.44 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for February declined by $3.09 to $59.61 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $5.83 to WTI. Gasoil for January delivery lost $10.50.

Today morning oil indexes demonstrate upward evolution amid correction.

U.S. president Donald Trump, speaking after the Iranian attack, said the United States will hit Iran with heavier sanctions. But he did not speak of a counterattack. He also offered Tehran chances for talks if it “changed its behavior,” a further sign of diplomacy.

Prices gave up most of their early gains as analysts said market tension could ease as long as oil production facilities remain unaffected by attacks. Tweets by U.S. President Donald Trump and Iran's foreign minister also appeared to signal a period of calm - for now.

Iran's missile attack on U.S.-led forces in Iraq came early on Wednesday, hours after the funeral of Qassem Soleimani, the commander of the country's elite Quds Force killed in a U.S. drone stroke on Jan. 3. In turn, Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting U.S.-led coalition personnel, the U.S. Trump said in a tweet that an assessment of casualties and damage from the strikes was under way. "All is well!" Trump said in the Twitter post. At the same time Iranian state television said 80 Americans had been killed and U.S. helicopters and military equipment damaged. Iraq, Germany, Denmark and Norway said none of their troops were killed or injured.

OPEC said, it will respond to any possible oil shortages if necessary but it also has "limitations", the United Arab Emirates energy minister said on Wednesday.

Suhail al-Mazrouei also said he sees no immediate risk of supplies through the important Strait of Hormuz being blocked.

The US Maritime Administration has issued an advisory warning of the possibility of Iranian attacks on US ships in Middle Eastern waters after a US military strike in Baghdad on Jan.3

US commercial vessels are advised to exercise caution and coordinate vessel voyage planning for transits of the Persian Gulf, Strait of Hormuz, Gulf of Oman, North Arabian Sea, Gulf of Aden, and Red Sea with NCAGS (US Fifth Fleet Naval Cooperation and Guidance for Shipping) and follow NCAGS’s recommendations and guidance whenever possible. The US Fifth Fleet, which is based in Bahrain, polices the Strait of Hormuz and the other important waterways in the region.

Daily oil flow through the Strait of Hormuz averaged 21 million b/d or the equivalent of about 21% of global petroleum liquids consumption in 2018. The US Fifth Fleet is responsible for about 2.5 million square miles of area including the Arabian Gulf, Gulf of Oman, North Arabian Sea, Gulf of Aden, and the Red Sea, according to its website. The policed area spans 20 countries and includes three critical choke points at the Strait of Hormuz, the Suez Canal and the Strait of Bab al Mandeb at the southern tip of Yemen.

The UK is also beefing up security around the Strait of Hormuz, which Iran had in the past threatened to close in case of war in the region. The UK has instructed preparations for HMS Montrose and HMS Defender to return to accompanying British ships in the Strait of Hormuz.

Shipping companies, including owners and operators of tankers and LNG carriers, are on high alert following escalated tensions in the Middle East, with risks of freight rates rising sharply, higher war insurance premiums and other risk mitigation efforts being implemented.

Japan’s Mitsui O.S.K. Lines, one of the country’s largest ship-owners, issued a new safety advisory for its vessels transiting the Strait of Hormuz.

According to the Energy Information Administration, U.S. crude stockpiles rose by 1.2 million barrels last week. The market was looking for a decline of 3.6 million barrels, according to forecasts. Gasoline inventories soared by 9.1 million barrels, compared with expectations for a rise of 2.7 million barrels. Distillate stockpiles climbed by 5.3 million barrels, versus forecasts for a build of 3.9 million barrels.

We expect bunker prices to decline today in a range of 8-12 USD.