BUNKERWORLD INDEX: Prices climb as firming crude sets trajectory amid varying regional bunker sentiment
4th June 2021 13:42 GMT

Bunker prices rose in the week to June 3 as stronger crude markets provided direction amid mixed regional marine market dynamics.

The Bunkerworld 0.5% sulfur fuel oil pricing index ended June 3 at $532/mt, showing a $4/mt rise on the day, a $22/mt rise on the week and an $11/mt increase compared with 30 days previously. The BW380 index, which represents value for 3.5% sulfur fuel oil, was at $419/mt, a $2/mt increase on the day, a $16.50/mt increase on the week and $3/mt higher than 30 days previously.

Crude markets have risen in recent days as lower crude stocks and expectations of higher consumption stoked bullish sentiment.

EIA data released late June 3 showed that crude stocks fell 5.08 million barrels to 479.27 million barrels in the week ended May 28. This marks the second week of drawdowns, with crude stocks at their lowest since the week ended Feb. 19.

In bunker markets, there are calls for petroleum-based fuels to be made significantly more expensive. The world's largest container company, AP Moller-Maersk, is calling for a carbon tax on fossil fuel-based marine fuels to push cost incentives for change as the shipping industry moves towards greener targets.

"We propose a carbon tax on ship fuel of at least $450 per ton fuel ($150 per ton CO2), a levy to bridge the gap between the fossil fuels consumed by vessels today and greener alternatives that are currently more expensive," Soren Skou, Maersk's CEO said in a LinkedIn post on June 2.

Term contracts for the supply of ex-wharf Singapore 0.5%S marine fuel bunker for June loading were heard concluded at flat to a premium of $1/mt over the FOB Singapore 0.5%S marine fuel cargo assessments, down from a premium of $1-$2/mt for May loading contracts.

Market sources on June 4 attributed the lower settlement levels this month to an oversupplied market across Asia coupled with weak demand. Ex-wharf sellers were also keen to move ample inventories. "[I] haven't heard of any ex-wharf seller with no stock, in fact most are asking for bids," a supplier said.

Demand in northwest Europe was expected to carry through from previous week as satisfactory at best, with no concerns over availability.

Market players in the west Mediterranean cited generally poor demand for the third consecutive week, with ample availability pressuring premiums. There were 3.5%S FO loading delays at Algeciras, Spain, but this was not expected to linger into the coming week.

Spot bunker demand in Argentina has been increasingly supported by agricultural exports. In Panama unstable demand and strong competition led to wide price ranges while stronger demand and refinery pricing led to steep increases in Chile.

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 BW 0.5% Sulfur 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 .,
4th June 2021 13:42 GMT