MABUX: Bunker market this morning, Dec.01

Comparison of the Market Bunker Price Index (MBP) with the MABUX Digital Bunker Price Index (DBP) in the four major hubs showed that on 30 November 380 HSFO and VLSFO bunker fuel were overvalued slightly in almost all ports considered, with the exception of Rotterdam (380 HSFO fuel at the port 30 was undervalued by 6.00 USD on Nov.30), while MGO LS prices were undervalued in all ports except Houston.

Meantime, world oil indexes fell slightly on uncertainty about whether OPEC+ would agree to extend large output cuts at talks this week.

Brent for January settlement fell by $0.59 to $47.59 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for January delivery decreased by $0.19 to $45.34 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $2.25 to WTI. Gasoil for December delivery lost $4.50 – $387.00 .

Today morning oil indexes do not have any firm trend so far.

OPEC and allies led by Russia are looking for a consensus on oil output policy for 2021, after an initial round of talks on Nov.29. OPEC+ had been due to ease production cuts from January 2021, but a second coronavirus wave has reduced demand for fuel around the world. The group is now considering rolling over existing cuts of 7.7 million barrels per day, or around 8% of global demand, into the first months of 2021. Talks were now focusing on extending cuts by three to four months, or on a gradual increase in output.

It was reported that Iraq would not ask OPEC for exemption from a pact aimed at reducing output, so that oil prices are expected to reach about $50 at the beginning of 2021. As per report, the commitment of members to the deal would help boost oil prices and Iraq was not seeking exemption fearing from new retreat in oil prices.

Goldman Sachs said the surge in COVID-19 cases in the winter would not prevent the oil market rebalancing as a result of vaccine progress, saying it saw Brent rising to $65 in 2021. Reuters in turn forecasts Brent would be average $49.35 a barrel next year.

Prices also found some support after Moderna Inc said it will apply for U.S. and European emergency authorization of its COVID-19 vaccine on Nov.30 based on full results from a late-stage study showing its vaccine was 94.1% effective with no serious safety concerns.

Venezuela has restarted direct shipments of crude oil to China despite U.S. sanctions.
Until now, Venezuela’s oil company sold oil to China via ship-to-ship transfers at sea, but now tankers loaded with Venezuelan crude are sailing straight to China. China is the biggest buyer of Venezuelan crude. As a result of the sanctions, Venezuela’s production and exports have suffered gravely, with last month’s average in exports falling to 359,000 bpd. The drop followed the expiry of a grace period Washington had given to commodity traders to wind down their oil-for-fuel swap business with Venezuela, which was allowed for humanitarian reasons.

In the United States, the number of operating oil and natural gas rigs has risen for the fourth month in a row as producers return to the wellpad with crude prices mostly trading over $40 a barrel since mid-June.

Japan, South Korea and a number of international shipping groups have warned the European Union against its plan to add greenhouse gas emissions from the maritime sector to Europe’s carbon market. As the 27-country EU seeks to steer its economy towards “net-zero” emissions by 2050, the executive European Commission wants to expand its carbon market to shipping. The opposition side warned that adding shipping to Europe’s carbon market could stoke trade tensions, and cause extra emissions by prompting ships to take longer routes to avoid stops in Europe. Shipping produces 2.1 percent of global CO2 emissions, a share expected to rise if left unchecked, threatening global efforts to curb climate change.