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MABUX: Bunker market this morning, Jan.12, 2021

MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO in the main world hubs) rose on Jan.11:

380 HSFO - USD/MT - 359.98 (+3.40)

VLSFO - USD/MT – 447.00 (+6.00)

MGO - USD/MT – 503.00 (+3.76)

Correlation of the MBP (Market Bunker Prices) Index vs the DBP (Digital Bunker Prices) Index in the four global largest hubs showed on Jan.11, that in two ports: Rotterdam and Singapore, all fuel grades were moderately undervalued compared to the DBP Index. This kind of situation has been registered in Rotterdam for the first time. As a result, 380 HSFO fuel in Rotterdam was undervalued by $ 8, in Singapore - by $ 11; VLSFO - $ 7 and $ 6, MGO LS - $ 16 and 26, respectively. In Fujairah, 380 HSFO was overvalued by $ 4 compared to DBP Index, VLSFO - by $ 5, but MGO LS was undervalued by minus $ 21. And only in Houston, all fuel grades were moderately overpriced: 380 HSFO – plus $ 10, VLSFO – plus $ 24, MGO LS – plus $ 6.

World oil indexes changed irregular on Jan.11 as coronavirus lockdowns around the world renewed concerns about global fuel demand.

Brent for March settlement fell by $0.33 to $55.66 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for February delivery increased by $0.01 to $52.25 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.41 to WTI. Gasoil for January delivery gained $2.00 – $445.75.

Today morning oil indexes have turned back to moderate upward evolution.

The pressure on fuel indexes has been generated by the renewed concerns about demand due to very high numbers of new corona cases and further mobility restrictions. Extended lockdowns in response to the continuing surge in Covid-19 infections in Europe has quashed hopes that fuel demand on the continent could rebound in the first half of the year. Despite strict national lockdowns, Britain is facing the worst weeks of the pandemic. Mainland China saw its biggest daily increase in virus infections in more than five months, as new infections rose in Hebei province, which surrounds the capital, Beijing. The United States is also tightening Covid-19 containment measures.

We expect IFO and MGO bunker prices may fluctuate today in a range of plus-minus 1-3 USD.