MABUX World Bunker Index (consists of a range of prices for 380 HSFO, VLSFO and MGO in the main world hubs) continued slight downward movement on March 10:
380 HSFO: USD/MT – 428.02 (-1.80)
VLSFO: USD/MT – 531.55 (-4.50)
MGO: USD/MT – 597.33 (-4.57)
As of March 10, a correlation of MBP Index (Market Bunker Prices) vs DBP Index (Digital Bunker Prices = MABUX Digital Benchmark) in four largest global hubs showed that 380 HSFO fuel was undervalued in three selected ports ranging from minus $ 9 (Fujairah) to minus $ 27 (Rotterdam). Only in Houston, DBP Index showed an overcharge of 380 HSFOs by $ 1. Three ports, according to DBP Index, also showed an underestimation of VLSFO fuel grade: from minus $ 12 in Rotterdam to minus $ 21 in Singapore. Houston recorded an overvaluation of the VLSFO by plus $ 19. MGO LS, according to DBP Index, remains undervalued in three ports ranging from minus $ 13 (Fujairah) to minus $ 39 (Singapore). Houston is the only exception again, where MGO LS has been overcharged by $ 14. As a result, Houston is currently the only port to register an overpricing of all bunker fuel grades.
World oil indexes changed sideways on March 10 after a large jump in U.S. crude inventories in the aftermath of last month’s Texas winter storm.
Brent for May settlement rose by $0.38 to $67.90 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate for April delivery increased by $0.43 to $64.44 a barrel on the New York Mercantile Exchange. The Brent benchmark traded at the premium of $3.46 to WTI. Gasoil for March delivery lost $7.25 – $530.50.
Today morning oil indexes continue slight upward evolution.
The Energy Information Administration (EIA) reported an inventory build of 13.8 million barrels for the week to March 5. At 498.4 million barrels, U.S. crude oil inventories are about 6% above the five year average for this time of year. A draw in gasoline stocks and another one in distillates, however, offset the negative news. EIA also said, U.S. crude production is still expected to fall by 160,000 bpd in 2021 to 11.15 million bpd. Its previous monthly forecast was for a drop of 290,000 bpd.
A combination of factors including top importers China and India drawing crude from storage at current high prices and expectations of a return in Iranian supplies have also pushed fuel indexes down.
Heavy maintenance work on North Sea oil fields is helping erode the flow of crude to Asia from some suppliers in the Atlantic basin as a key price spread between the two region widens. North Sea supplies will be significantly constrained throughout the second quarter by routine maintenance programs.
We expect prices for 380 HSFO and VLSFO may rise today in a range of plus 1-3 USD, while MGO prices may change irregular in a range of plus-minus 3-7 USD.