BUNKERWORLD INDEX: Prices fall amid tepid prompt demand, crude headwinds
7th May 2021 11:05 GMT

Bunkerworld index prices lost ground May 7 amid some bearish short-term sentiment in regional marine fuel markets and rangebound crude.

The Bunkerworld 0.5%S fuel oil pricing index ended May 6 at $512/mt, down $9/mt on the day, up $3/mt on the week and $30/mt higher than 30 days previously.

The BW380 index, which represents value for 3.5%S fuel oil, ended May 6 at $411/mt, down $5/mt on the day, up $4/mt on the week and $30/mt higher than 30 days previously.

Crude oil futures have been dampened by the threat of mutant coronavirus strains from India but supported by a weaker US dollar. Also, the OPEC+ coalition exceeded its production quotas by 3.316 million b/d through to March.

Bunker costs, at least for contracts, may rise in the coming weeks and months, A.P. Moller-Maersk CFO Patrick Jany said in an earnings call accompanying his company’s Q1 2021 results. While prices in Q1 were lower on the year they were higher on the quarter and this implies a "higher cost base going forward," he said May 5.

S&P Global Platts data shows 0.5% sulfur fuel oil Rotterdam barge swaps in contango through to July, then entering a shallow backwardation until December.

Supplies of 0.5%S marine fuel at Singapore have been ample but Singapore-based traders are cautiously optimistic that a recovery of spot bunker demand is on the horizon, after concerns over the “long-term sustainability of such depressed prices.”

European bunker markets have experienced low demand recently and this may continue as some bunker buyers have said they will stay away from the market amid rises in crude, while they wait for prices to cool off.

Product availability in the Amsterdam-Rotterdam-Antwerp hub is expected to be good in the coming week with no loading issues.

Bunker activity in Panama. which has been stable to slightly higher in the last few days, is expected to enter into a slower rhythm in May on seasonal factors, market sources said. In Colombia, market uncertainty prevailed as widespread protests against government policies led to volatile pricing.

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

Platts ,
7th May 2021 11:05 GMT