Bunkerworld Index: Prices waver as lockdowns intensify
22nd January 2021 15:50 GMT

*Bullish sentiment at Singapore, Fujairah
**Limited availability supports ARA VLSFO
**Robust demand at Panama may support levels

Bunker prices faltered during the week beginning Jan. 18 as bearish pressures in the wider oil complex outweighed instances of bullish sentiment in marine fuel markets, a pattern some analysts suggest could continue in the near-term.
The BW0.5%S Index ended Jan. 21 at $447/mt, down $4/mt on the day, up $1/mt on the week and $41/mt higher than 30 days previously.
The BW380 Index, which represents value for 3.5% sulfur fuel oil, fell $2/mt on the day to $356.50/mt, slid $1.50/mt on the week and was $30.50/mt higher on the month.

The escalation of the COVID-19 pandemic has once again become the focal point of the oil complex's attention. The UK suffered its worst day of the pandemic in the week of Jan. 17, when the country registered more than 1,800 deaths, while fresh outbreaks in
multiple Chinese cities also sparked fears that the country could experience another debilitating wave.
Chinese authorities have already imposed mobility restrictions in affected cities and have called on citizens to refrain from any travel during the upcoming Lunar New Year holidays.

With oil demand from the pandemic-stricken western hemisphere already weak, market analysts fear that tougher and longer lockdowns in China could further exacerbate the situation, and send prices falling.
S&P Global Platts assessed the Dated Brent crude benchmark at $55.99/b Jan. 21, down 43 cents on the day, up $1.05 on the week and up $4.62 from Dec. 23.

A slowdown in the recent trend of rising prices might prove welcome to the bunker industry. The prospect of rising oil prices points to a rising rate of risks to marine fuel quality, Soren Holl, CEO of bunker trader and broker KPI OceanConnect, told Platts in an
"With the lower prices we see less tendency to go to the limits when you [manufacture] the blends," he said. In a higher cost environment, there is greater pressure to squeeze value from blends and this can mean going for cheaper and possibly less suitable
feedstock. As such, expected gains in the oil complex, and therefore in marine fuel costs, may present some risks.
The volume of spot trading activity across major bunkering hubs of Singapore and Fujairah was likely to hinge on the direction that flat prices would take in the ensuing days, traders said.

A prevailing bullish sentiment around the direction that the upstream Singapore marine fuel 0.5%S market was likely to take in the near term would bode well for the marine fuel 0.5%S bunker market, said traders.
Demand in the Amsterdam-Rotterdam-Antwerp region has continued to be slow but prices for 0.5%S marine fuel remain relatively supported, particularly the crack spread, on the back of limited refinery runs, and this looks set to continue amid ongoing lockdowns.

Loading delays due to poor weather conditions are expected to clear in the coming week.
Marine fuel 0.5%S prices in Panama could keep the strong levels seen in the last few days as transit in the Panama Canal continued to be slow amid heavy demand for transit slots, according to market sources.

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 .,
22nd January 2021 15:50 GMT