How are bunker prices doing compared with the rest of the oil market and in what direction are they going?
Recent Price Movements: A divergence between crude & bunkers
In mid-April we looked at the ‘bigger picture’ developments in the oil market and highlighted the key drivers that are likely to influence the absolute price of oil (and how bunker prices fitted into this). In this report we dig a bit deeper, looking at what is happening to the price of bunkers in relation to crude and other main oil products; are there differences and are we back to ‘normal’ yet?
Current crude oil prices are $2/bbl higher than in mid-April (equivalent to $15/ton), but conversely VLSFO prices in Singapore and Fujairah are more than $10/ton lower. Singapore VLSFO prices tended to track crude price movements through the second half of April and early May, but over the past 3 weeks there has been a big divergence. Brent crude is currently towards the high of the recent $66-69/bbl range, but VLSFO prices East of Suez are now in a much lower trading range than in mid-April, at around $485/ton.
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