BUNKERWORLD: Marine fuel prices bearish despite pockets of tightness, congestion
1st April 2021 12:45 GMT

Bunker prices showed a largely downward trajectory in recent days, despite instances of limited supply and delays, but bullish signals from crude may change the scenario.

The Bunkerworld 0.5%S bunker fuel pricing index ended March 31 at $488/mt, a drop of 1/mt on the day, level on the week, and $12/mt lower than 30 days’ previously.

The BW380 Index, which represents value for 3.5%S fuel oil, ended the day at $394/mt, which was down $4.50/mt on the day, up 50 cents/mt on the week, and level compared with 30 days previously.

The crude oil complex mostly tracked downward in recent days and this set the tone for bunkers. This may change as crude oil futures drew support at the end of the week from US Energy Information Administration data, which showed a decrease in crude and gasoline inventories, with the market also garnering support from expectations that OPEC+ will roll over its production quotas into May.

The largely bullish EIA report was still a cause of concern to market analysts, however, with Edward Moya, senior market analyst at Oanda, saying in an April 1 note that, with the data showing US production has surged to over 11 million b/d, there could be some concern among OPEC+ members that they may lose market share to the US.

Demand for bunker fuel from tankers may strengthen over the coming months. Tankers are likely to see higher demand due to the improving COVID-19 environment, analysts at S&P Global Platts Analytics said. “The second half of 2021 could be the most likely opportunity for spikes as runs significantly increase supplies primarily from OPEC but even the US is forecast to increase production,” they said.

The outlook for bunker supply at Fujairah is for better supply than the market has seen recently, after suppliers there this week confirmed their ability to once again offer 0.5%S FO for prompt delivery dates, after domestic supply was compromised earlier in March when Uniper's 80,000 b/d refinery unexpectedly suffered an outage in the week starting March 7, leading to both crude processing units shutting down.

The European bunkers market is expected to remain supply-focused in the coming weeks, with demand expected to remain largely unchanged amid COVID-19. The timeline for easing of tight availability of high sulfur fuel oil in the Amsterdam-Rotterdam-Antwerp region was unknown. It was reported tight in the week until April 4.

Spot retail marine fuel markets along the US Gulf Coast were quiet March 31 as market participants monitored developing weather issues in the Houston Ship Channel, with sources bracing for impact during and after the upcoming Easter holiday weekend.

"A little bit [jammed up] because of the fog today, then this afternoon gale force winds start for about the next 18 hours," a supplier source said on the afternoon of March 31. "I'm sure some congestion is going to result for the holiday weekend. And looks like we might get more fog early next week, so doesn't exactly help either."

The BW Indexes are weighted daily indexes made up of price 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.

Click here to see prices: https://www.bunkerworld.com

Bunkerworld ,
1st April 2021 12:45 GMT