13 Mar 2014
Bunkerworld earlier reported that bunker prices during the first quarter (Q1) of 2010 found a degree of stability with the BW380 index of top bunkering ports averaging at $474 per metric tonne (pmt).
Within the Q1 2010 period, there was not a substantial variation in prices with averages as follows: January, $484; February, $467; March, $471 pmt.
Prices in major ports, such as Houston, Rotterdam, Singapore, and Fujairah, for 380 centistokes (cSt) fuel stayed in the $400 pmt range, despite a very brief foray just over $500 in the latter two ports in early January.
Average prices for the major ports for the quarter were as follows: Houston, $451; Rotterdam, $449; Singapore, $467; Fujairah, $471 pmt.
Singapore posted a high of $510 and a low of $439 pmt for 380 cSt fuel, Bunkerworld data showed.
Distillate prices traded in the $600 range with the BWDI index of distillate grades averaging $670 pmt for the first three months of this year.
In comparison, last year saw substantial changes in bunker with the BW380 averaged $267 pmt in Q1 2009, but increased throughout the year to $466 pmt for Q4 2009.
One can therefore see just a 1.7% increase in prices from the last quarter (Q4 2009) to this quarter, but a 78% increase comparing Q1 2009 to Q1 2010.
As has already been analysed, the gap between bunker and crude oil prices widened in March compared to earlier in the year.
The average differential was $125 pmt for Q1 2010, compared to $113 pmt in Q4 2009. For Q1 2009 it was just $60 pmt, with bunker and crude prices closer together.
Relative stability in crude prices helped guide bunker price moves. Crude averaged $79 per barrel for Q1 2010, trading in the $70s and low $80s. This compared to $76 for Q4 2009; however, it was just $43 per barrel in Q1 2009.
Crude oil prices have since moved on, literally, to higher levels. On April 1, 2010 oil prices rose to an 18-month high of $84.87 a barrel and have since dwelled above this level on the back of weakening US dollar.
Should this range of prices continue to dominate, there would appear to be some room for bunker prices to correct upwards.
However, when local factors are taken into account, they ultimately complicate the picture. Singapore, for example, has been well supplied with fuel oil cargoes over the last month and this has helped hold prices down.
Rotterdam has seen a decline in demand, which has also forestalled price increases - even as fuel oil prices have inched up. In Houston, some suppliers took tiny margins in March to hold prices down despite resupply costs moving higher.
Whether these local factors in major ports continue to affect prices remains to be seen in the coming months.
Taking into account crude oil prices movements during the first week of the second quarter, do you think bunker prices will remain stable in the second quarter?