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MABUX: Bunker market this morning, Nov.16.

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO (Gasoil) in the main world hubs) demonstrated slight downward trend on Nov.13:

380 HSFO - USD/MT - 310.05 (-2.76)

VLSFO - USD/MT – 367.00 (-3.00)

MGO - USD/MT – 433.70 (-1.66)

Meantime, world oil indexes also fell on Nov.13 pressured by fears about a slow recovery in the global economy and fuel demand due to rising COVID-19 infections.

Brent for January settlement fell by $0.75 to $42.78 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for December delivery decreased by $0.99 to $40.13 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.65 to WTI. Gasoil for December delivery lost $9.00 – $344.75 .

Today morning oil indexes turned into moderate downward movement.

New coronavirus infections in the United States and elsewhere are at record levels and tightening restrictions to contain the spread have dampened the prospect of a near-term end to the global health crisis.

It is expected that OPEC+ could extend the group’s current oil production cuts into 2021 or deepen them further if market conditions require. OPEC+ is due to reduce their existing cuts of 7.7 million barrels per day (bpd) by about 2 million bpd in January. Algeria, which currently holds the OPEC presidency, supported an extension of the current cuts into next year, adding that the next OPEC+ meeting could consider a six-month extension. An extension until the end of March is also being considered as an option. OPEC+ is due to meet next on Nov. 30 and Dec. 1, following a high-level ministerial meeting on Nov. 17.

Goldman Sachs cut its 2021 Brent crude price forecast but said a surge in COVID-19 cases in Europe and the U.S. only represented a “speed bump” before a potential vaccine and continued supply cuts by top producers tightened market fundamentals. The Bank cut its 2021 forecast for Brent to $55 per barrel from $59.4 per barrel previously and for the WTI price to $52.8 per barrel from $55.9 previously. The Bank also said that a year-end supply surplus forecast at about 1 million barrels per day (bpd) in December, and an uncertain demand outlook would prompt OPEC+ to delay a planned output rise in January by three months. This could bring the oil market back to a “shallow” 0.9 million bpd deficit in the first quarter of next year.

The five largest producers of crude oil in Africa face a combined production decline of 19 percent as a result of the pandemic’s effect on oil demand and the acceleration of energy transition efforts. The report published by PwC suggested that African countries—particularly the oil producers, including Nigeria, Angola, Egypt, Libya, and Algeria—could benefit if they choose to use their oil revenues for the early adoption of renewable energy. In fact, African oil exporters have a tough challenge to overcome if they are to diversify away from oil and into renewable energy, especially since governments there cannot afford to be as generous with green-focused economic stimulus as EU governments.

India reported its first yearly increase in petroleum consumption since February, proving the fuel-guzzling nation’s demand is back despite rising coronavirus cases. Total petroleum demand rose 2.7% year-on-year in October, reaching 17.8 million tons. Road fuels reached pre-pandemic levels, but it was demand for naphtha that really soared. Consumption of the petrochemical industry feedstock surged 15%.

At least 18 oil tankers are expected to load oil for export from Venezuela in the coming weeks in a sign the sanctioned OPEC nation’s crude exports may rebound this month. Venezuela’s oil exports fell to their lowest levels since the 1940s in October. Venezuela is also preparing to send this month several tankers that it had hired for domestic transportation under time-charter contracts to exports destinations, a strategy it began in August after some vessel owners stopped shipping Venezuelan oil due to sanctions.

We expect IFO bunker prices may decrease today by 3-6 USD while MGO prices may drop by 6-9 USD.