BUNKERWORLD INDEX: Prices climb on US hurricane, tightening HSFO
3rd September 2021 10:33 GMT

Bunker prices continued to climb during the week to Sept. 2 on the back of price support for the oil complex from hurricane disruption in the US and while 3.5% sulfur fuel oil availability has grown more limited in different regions.

The Bunkerworld 0.5% sulfur fuel oil index ended Sept. 2 at $541/mt, up $3/mt on the day, $12/mt higher on the week and $7/mt higher than 30 days previously.

The BW380 index, which represents value for 3.5%S fuel oil, ended the week at $445.50/mt, which was a rise of 50 cents/mt on the day, an increase of $7/mt on the week and $17.50/mt higher than 30 days previously.

Crude oil futures have risen, propelled by a weaker dollar, a supportive US unemployment report and extended disruptions from Hurricane Ida.

Singapore fuel oil paper swap trades during the Platts Market on Close assessment process in August rose 44% on the month to 20.89 million barrels, S&P Global Platts data showed, on the back of a doubling of high sulfur fuel oil trade volumes amid higher demand.

"One of the reasons for the strong demand is the increase in the number of scrubbers that we have back online now," a Singapore-based trader said. "And they are calling at Singapore for their bunker parcels."

The scrubber payout period is still 2-3 years as the spread between very low and high sulfur fuel oil, basis Singapore has been above $100/mt for the majority of 2021, which looked set to continue, S&P Global Platts Analytics said Sept. 2.

"By Jan. 1, 2030, scrubbers could pass the 6,000 mark by 2030. If we don't see penetration of clean alternative fuels, we believe scrubber usage near 7,000 to cover the shortfall," Platts Analytics said.

Term contracts for the supply of ex-wharf 380 CST high sulfur bunker fuel for loading in September in Fujairah has firmed up on limited availability, traders said.

Increased appetite for HSFO in the Middle East for power generation could extend into September, limiting supply of product into the bunker pool, industry sources said.

recent tightness of high sulfur material in Gibraltar was expected to continue into next week. However, availability is good across all other grades in the Mediterranean, and good weather has meant no delays are expected.

Retail marine fuel bunkers markets in North America saw spot pricing reach multi-week highs Sept. 2 on support from a rising crude complex, with post-storm production and logistics issues also propping up values.

The port of New Orleans set conditions to normal on Sept. 2, but sources were monitoring logistics following Hurricane Ida making landfall in the region over the weekend.

"Information still limited, a lot of moving parts," a source said of New Orleans. "Hearing outbound traffic in some parts is starting to move."

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 ,
3rd September 2021 10:33 GMT