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Bunkerworld Index: Prices waver amid economic headwinds
24th December 2020 11:27 GMT

The S&P Global Platts Bunkerworld Index showed signs of reaching a ceiling as flashes of bullish supply fundamentals in the wider crude oil complex and in marine fuel markets butted against the economic effects of COVID-19 news.

The BW0.5%S Index ended Dec. 23 at $406/mt, up $1/mt day on day, $2/mt month on week and $33/mt higher month on month.

The BW380 Index, which represents value for 3.5% sulfur fuel oil, flickered upwards by 50 cents/mt on the day to $326/mt, which was a decrease of $4 on the week and a comparatively modest rise of $13.50 on the month.

Crude futures have drawn support from dollar weakness following news of a possible EU-UK deal, and on inventory draws reported by the US Energy Information Administration.

However, political flip-flopping in the US over fiscal relief measures continued after US president Donald Trump demanded changes to the Congress-approved stimulus package.

Equally, fears of a new strain of coronavirus in the UK and continuing lockdowns cast a bearish shadow over sentiment.

Platts assessed the Dated Brent crude benchmark at $51.37/b Dec. 23, up 97 cents/b day on day, up 64 cents/b week on week and $5.58/b higher month on month.

The US imported 151.4 million sets of Christmas lights over the first 10 months of 2020, an increase of 3% year on year, but China's share of deliveries has plunged from the levels of previous years, BIMCO said in a statement Dec. 22.

Total US containerized imports from China in the first 10 months of 2020 were down 14% from the equivalent period of 2017 and down 7% year on year, BIMCO data showed.

"The change in US imports of Christmas tree lights clearly shows the result of the trade war on the goods affected, as well as the shift in manufacturing patterns that has occurred within Asia, as US importers seek to avoid paying extra tariffs on goods from China," BIMCO chief shipping analyst Peter Sand said in a note.

Marine fuel 0.5%S bunker premiums across major North Asian bunkering hubs were expected to remain supported going into the first half of Jan. 2021. Relatively thin availability has wound down stocks for the financial year-end.

Additionally, shipowners are looking to meet their requirements for product deliverable from early January onwards. Together, these factors are expected to support the, traders said.

Demand at Rotterdam may see recent firmness dissipate to some extent after seasonal demand wanes and as expectations for next year remain unclear on the back of conflicting fundamentals, caught between vaccine optimism and lagging demand.

Bunker markets on the Gulf Coast and in Panama are expected to slow down in the last week of the year after experiencing a flurry of activity in the last few days, a scenario traditionally seen in the period prior to the long weekend for the Christmas holiday, sources said. However, some movement might still be strong on Dec. 28 and Dec. 29, as 2020 comes to a close.

The BW Indexes are weighted daily indexes made up of assessments at 20 key bunkering ports. To obtain a representative geographical spread, the ports were selected by size with reference to their geographical importance.

The BW0.5%S Index ports are Hong Kong, South Korea, Shanghai, Singapore, Japan, Las Palmas, Durban, Fujairah, Gibraltar, Piraeus, Rotterdam, St Petersburg, Houston, Los Angeles, New York, Balboa and Santos.

The BW380 Index ports are Busan, Canary Islands, Colombo, Durban, Fujairah, Gibraltar, Hong Kong, Houston, Los Angeles, New York, Offshore Nigeria, Panama Canal, Piraeus, Rotterdam, Santos, Shanghai, Singapore, St Petersburg, Suez and Tokyo.

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Bunkerworld .,
24th December 2020 11:27 GMT