It is well known that Singapore is the world’s main shipping fuel hub, trading over 40 percent of it globally. Singapore’s 380-centistoke grade bunker fuel, closed at $183.21 per metric tonne on Tuesday, almost $10 lower from the previous day.
The fall in bunker fuel follows the tumble in crude prices after the Organization of Petroleum Exporting Countries ended their meeting last week without even mentioning production targets, indicating that members will continue to pump near record levels. OPEC members now seem to be defending market share against one another internally and against competitors like Russia and North America.
Well, let the oil prices drop. As a fuel user, all we worry about is the fuel quality for a safe and trouble-free running of ships. For the ports of Rotterdam and major Russian ports – please read about the recent problems being reported by ships.
- Port of Rotterdam – Wax formation in MGO bunker and Purifier heavy sludge formation.
- Russian Bunkers – Here are the updates. Update 1 & Update 2
Drop in Bunker Fuel Prices has caused:
- The average daily fuel cost to operate a Very Large Crude Carrier (VLCC) has fallen from over $75,000 to under $18,000 currently, meaning a sharp reduction in operating costs for shippers.
- Despite this fall in costs, bunker traders said that demand from shippers remained weak as they struggle with a slowdown in global seaborne trade.
- China, the world’s biggest exporter, reported a 6.8 percent drop in exports in November from a year earlier, while its imports slowed 8.7 percent, as the country’s economy grows at its slowest pace in decades.
- Another trader said that demand would only increase if the average distance of ships’ voyages rose and if ship owners filled their tanks in anticipation of a price rise. Yet, with the oil supply glut expected to last well into next year and the economic outlook also not improving, this is seen as unlikely.
On the Other End – The Russian Bunker Fuel Saga Continues where ships continue to face machinery problems ranging from main engine fuel pump seizures to complete loss of power or blackout. Bunker prices in the port of St Petersburg dropped to historical lows Tuesday because of increased competition from Rotterdam. Bunker suppliers in St Petersburg face a severe risk of shipowners switching to Rotterdam for bunkering MGO as the prices are profitable low.
|380 cSt price in $/MT||
LSMGO price in $/MT
Prices are updated based on latest information received! Latest updated on 9th December 2015. The above prices are for reference purpose only.
Click here to know the Latest Bunker fuel prices
Source: Reuters & Viswa Lab.