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MABUX: Bunker market this morning, Jan.06, 2021

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO in the main world hubs) turned into moderate downward trend on Jan.05:

380 HSFO - USD/MT - 346.17 (-1.68)

VLSFO - USD/MT – 432.00 (-4.00)

MGO - USD/MT – 492.38 (-2.97)

Correlation of MBP (Market Bunker Prices) Index vs DBP (Digital Bunker Prices) Index in the four global largest hubs showed on 05 January, 380 HSFO fuel was undervalued in Rotterdam by $ 14 and in Singapore by $ 2, remaining overpriced in Fujairah and Houston (plus $ 10 and $ 20, respectively). VLSFO fuel remains moderately overpriced in all selected ports, ranging from $ 8 (Rotterdam) to $ 47 (Houston). MGO LS, in turn, was undervalued in all ports ranging from minus 13 (Fujairah) to minus 29 (Singapore), with the exception of Houston (was overvalued by $ 38).

World oil indexes rose on Jan.05 after news that Saudi Arabia will make voluntary cuts to its oil output.

Brent for March settlement rose by $2.51 to $53.60 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for February delivery increased by $2.31 to $49.93 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.67 to WTI. Gasoil for January delivery gained $12.00 – $431.75.

Today morning oil indexes have resumed trading session by upward evolution.

During talks with the Organization of the Petroleum Exporting Countries and others including Russia, Saudi Arabia offered to make voluntary cuts to its oil production in February. The producer group was setting aside a possible output increase on fears that the market could be flooded with crude if new coronavirus lockdowns further depress demand.

The 2020 crisis put an end to the growth in U.S. crude oil production, which had just hit 13 million barrels per day (bpd) before oil prices and demand collapsed with the spread of the pandemic. Between March and May 2020, U.S. oil production plunged by over 2.5 million bpd. In May, U.S. oil production hit 10 million bpd—its lowest monthly level since late 2017. EIA estimates point to U.S. oil production staying at around 11 million bpd for at least another year, as production rates from existing wells in the U.S. shale patch will fall faster than production gains from fewer newly drilled wells.

The American Petroleum Institute (API) reported on Jan.05 a draw in crude oil inventories of 1.663 million barrels for the week ending January 1.

We expect IFO bunker prices may rise today by 10-15 USD today while MGO prices may also gain 12-17 USD.