VLSFO prices back above $600.

When VLSFO was fully introduced in December 2019/ January 2020, Singapore prices were in the range $615-660/mt; so far in November have averaged $620/mt – we are back to where it all started!

Events over the past 22 months are well documented and will be written about for many years to come. The oil industry will be a mere microcosm of all this, but when you are involved in the bunker market these oil industry details become significant. The collapse in oil demand at the start of the pandemic led VLSFO prices down to around $250/mt. The subsequent cutbacks in OPEC+ crude production, combined with the loss of US crude supplies and the eventual rebound in oil demand have all contributed to the rise in oil prices and the reason why VLSFO has moved back above $600/mt. The clear question is: Where do we go from here?

Analysts foresee prices falling from here
Some analysts are indicating that we are currently at a peak, and that prices will ease from here. Brent crude futures (front month) hit a high of above $86/bbl in late October and are currently trading around $82/ bbl. The pointers now are towards $75/bbl in Q1 next year and $70/bbl by Q2. On this basis, it would imply Singapore VLSFO down from around
$610/mt currently, to around $565/mt in Q1 and $530/mt by next June.

The fundamentals always ‘win out’
The recent price highs have come about as oil demand continues to rebound and OPEC+ maintain their planned, and constrained increases in production. Despite some pressure from the US on OPEC+ to go beyond this, there has been no shift in OPEC+ (nor Saudi) policy for countries with spare capacity to raise output in light of current prices. This is despite some member countries producing below their allocated quotas because of previous low prices and a lack of spending in their upstream sectors.
This rise in demand and constraints on supply has left oil stocks at low levels, and markets fundamentally tight. Also, although US crude production is rising in the wake of higher oil prices, the gains are considered relatively low, with a number of upstream companies ‘forced’ to reduce debts or pay shareholder dividends rather than go out on a massive expansion in drilling activity.
The overall result has been that oil demand has exceeded oil supply so far this year, and we have been in an extended period of stockdraws, leaving the market tight and Brent prices well in to the $80s.
The expectations now are that oil supply will continue to increase, even under the current OPEC+ strategy. On the demand side, total consumption is now back close to pre-pandemic levels and so future gains are seen as far more modest, stalling at just above 99 million b/d through to the middle of next year.

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VLSFO: Back To Where We Started on ‘Day 1’ – What’s Next?

(WASHINGTON) — The Coast Guard is conducting a Pacific Coast Port Access Route Study (PAC-PARS). The PAC-PARS will consider whether existing or additional routing measures are necessary to improve navigation safety due to factors such as planned or potential offshore development, current port capabilities and planned improvements, increased vessel traffic, existing and potential anchorage areas, changing vessel traffic patterns, effects of weather, or navigational difficulty.

Vessel routing measures are implemented to reduce the risk of marine casualties. Examples of potential measures include traffic separation schemes, two-way routes, recommended tracks, deepwater routes, precautionary areas, and areas to be avoided.

The recommendations of the study may subsequently be implemented through rule makings or in accordance with international agreements. The primary areas of this study include: San Diego, Calif.; Los Angeles/Long Beach, Calif.; San Francisco, Calif.; Humboldt Bay, Calif.; Coos Bay, Ore.; Yaquina Bay, Ore.; Astoria, Ore.; Grays Harbor, Wash.; and Puget Sound, Wash.

Mariners are encouraged to participate in this study by submitting comments and input to the Federal Register. To submit your comment online, go to https://www.regulations.gov and insert Federal Register docket number “USCG-2021-0345” in the search box. Click “Search” and then click “Comment Now.” All comments and material received on or before Jan. 25, 2022, will be considered.

For questions regarding this marine safety information bulletin or the study, email the PAC-PARS team at PACPARS@USCG.MIL.

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https://www.professionalmariner.com/safety-bulletin-comments-sought-on-pacific-coast-port-access-route-study/

(OSLO, Norway) — The world’s first electric and self-propelled containership, Yara Birkeland, has completed its maiden voyage in the Oslo fjord. On Friday, Norwegian Prime Minister Jonas Gahr Store was given a tour of the vessel by the CEO of Yara, Svein Tore Holsether.

“We are proud to be able to showcase the world’s first fully electric and self-propelled containership. It will cut 1,000 tonnes of CO2and replace 40,000 trips by diesel-powered trucks a year,” said Holsether.

Yara Birkeland, which has already received wide coverage in Norwegian and international media, has been developed in collaboration with the Kongsberg Group. The ship was built by Vard with financial support from Enova, and will be in commercial operation from 2022.

The 262-foot Yara Birkeland transits off Brevik, Norway, in December 2020. The all-electric containership, built by Vard for the Norwegian fertilizer company Yara International, is scheduled to gradually shift from manned operations and become autonomous. Kongsberg photo

“We have been looking forward to this day for a long time,” said Holsether. “The Yara Birkeland will transport mineral fertilizer between Porsgrunn and Brevik and will contribute to significant emission cuts during transport. This an excellent example of green transition in practice, and we hope this ship will be the start of a new type of emission-free containerships. There are a lot of places in the world with congested roads that will benefit from a high-tech solution like this.”

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https://www.professionalmariner.com/worlds-first-electric-containership-completes-maiden-voyage/

VANCOUVER, British Columbia) — Robert Allan Ltd. (RAL) and Svitzer have signed a design agreement for a new generation of methanol fuel cell tugboats. Utilizing a combination of fuel cells, batteries and electric propulsion in a new and unique towing configuration, this new tug will serve as a pilot project for future Svitzer newbuilds.

The close cooperation between Svitzer and Maersk will allow for the transfer of knowledge and experience from the small scale of inshore tug operations to oceangoing containerships.

As the designers of the world’s first hybrid tug on North America’s West Coast, Robert Allan Ltd. has been at the forefront of “green” technology for more than 10 years. It has continually pushed the boundaries of new technologies to provide its customers with innovative and environmentally friendly alternatives to conventional diesel-mechanical power trains.

– Robert Allan Ltd.

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https://www.professionalmariner.com/ral-svitzer-sign-design-agreement-for-methanol-fuel-cell-tugs/

(STONINGTON, Conn.) — The Coast Guard Foundation, a nonprofit organization committed to strengthening the Coast Guard community and service by supporting members and families, announced that this Giving Tuesday, the organization will inspire generosity by launching a $25,000 matching gift challenge. Supporting its work to assist Coast Guard members and their families, GEICO Military will triple match all donations to the foundation received Tuesday, Nov. 30.

Giving Tuesday is a global generosity movement, unleashing the power of people and organizations to transform their communities and world. Giving Tuesday will kick off the generosity season by inspiring people to give back on Nov. 30, the first Tuesday after Thanksgiving.

“Coast Guard men and women are there in the moments we need them the most, saving lives, preserving our oceans and protecting our Nation,” said Susan Ludwig, president, Coast Guard Foundation. “Your generous gift to our Giving Tuesday matching gift challenge supports our mission to be there for service members and their families. This includes vital projects like our scholarship program, morale and wellness initiatives, and relief for families when a service member is lost in the line of duty.”

Ludwig continued, “GEICO Military leads by example by supporting our mission and driving interest in our work. Thank you, GEICO Military, for partnering with us on this special day of giving.”

To join the Coast Guard Foundation’s Giving Tuesday initiative, visit coastguardfoundation.org/givingtuesday.

To learn more about the Coast Guard Foundation or to help support its work, visit www.coastguardfoundation.org or call (860) 535-0786.

– Coast Guard Foundation

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https://www.professionalmariner.com/coast-guard-foundation-geico-military-launch-giving-tuesday-matching-gift-challenge/

(WASHINGTON) — As part of the Biden administration’s efforts to advance clean energy development, the Bureau of Ocean Energy Management (BOEM) on Nov. 12 announced its designation of the Morro Bay Wind Energy Area (WEA) off the coast of California. The WEA is located approximately 20 miles offshore the central California coastline and contains approximately 240,898 acres (376 square miles).

BOEM will now prepare an environmental assessment (EA), as required under the National Environmental Policy Act, to consider potential impacts from site characterization activities (e.g., biological, archeological, geological, and geophysical surveys) and site assessment activities (e.g., installation of meteorological buoys) within the WEA. BOEM’s preparation of the EA will initiate a public comment period along with two virtual public meetings.

Bureau of Ocean Energy Management photo

“Offshore wind presents a significant opportunity for California and our nation as we transition to clean, renewable energy. Today’s announcement represents significant progress toward that future,” said BOEM Director Amanda Lefton. “As the process continues, BOEM is committed to environmental reviews, which are critical for a strong resource management program, and to robust public engagement.”

BOEM completed its review of a construction and operations plan (COP) for the Vineyard Wind project earlier this year and is currently reviewing 10 additional COPs. Moreover, BOEM plans to review at least an additional five COPs by 2025, for a total of at least 16 COP reviews representing more than 19 gigawatts of clean energy.

The 60-day public comment period began on Nov. 12 and will extend through 11:59 p.m. Eastern Time on Jan. 11, 2022. BOEM will hold two virtual public meetings during this time.

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https://www.professionalmariner.com/us-designates-wind-energy-area-off-central-california/