BUNKERWORLD INDEX: US rate hike weighs on VLSFO despite falling supplies
22nd April 2022 11:28 GMT

Bunker prices dipped in the week ending April 21 as hawkish interest rate policy in the US outweighed concerns about regional availability of marine fuel and led to a decrease in 0.5% sulfur fuel oil values.

The S&P Global Commodity Insights Bunkerworld 0.5% sulfur fuel oil index ended the week at $912/mt, down $2/mt on the day, down $6/mt on the week and $29/mt lower than the 30 days previously.

The BW380 index, which represents value for 3.5% sulfur fuel oil, was more bullishness and ended the week at $745/mt, up $2/mt on the day, up $18/mt on the week and $14.50/mt higher than the 30 days previously.

Crude oil futures have seen downward pressure after Jerome Powel, chair of the US Federal Reserve, signaled an aggressive interest rate hike April 21, heightening risks of restrictions on economic activities and raising fears of lower oil consumption.

Weighing against that, analysts said they expect that the EU will announce new plans to ban Russian oil after the French elections on April 24.

Many oil products, especially middle distillates, are in the spotlight, amid fears of supply disruptions from Russia. While there are concerns about 3.5% fuel oil as well and reports of tightness and rising prices for the grade, storage firm Royal Vopak has seen flows of fuel oil continue to Rotterdam.

“When it gets to basic fuel oil that moves from Russia into Rotterdam to be used as bunker fuel for all the transportation in the port of Rotterdam, those flows are still happening…and where possible with our existing customers we are facilitating that,” Vopak CEO Dick Richelle said April 20 alongside the company's Q1 report.

At China's Zhoushan, above-average demand for low sulfur fuel oil bunkers has progressively lowered inventory levels and tightened cargo supply, though sporadic arrivals of replenishment stocks have reportedly helped ease inventories at times, local bunker suppliers said.

In Northwest Europe, marine gasoil suppliers have talked of concern over future supply, as dwindling gasoil feedstocks continue to be routed towards diesel production. Jet fuel cracks in Northwest Europe exceeded diesel premiums on the week, causing refineries to divert blending material from the diesel pool and exacerbating existing gasoil tightness.

In Chile, spot pricing has been elevated in recent days as at least one local supplier remains unable to offer spot volumes for prompt delivery as they await resupply cargoes.

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.

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

Bunkerworld .,
22nd April 2022 11:28 GMT