The global bunker fuel market experienced a slight decline in prices during the 50th week of the year. The prices of High Sulfur Fuel Oil (HSFO), Very Low Sulfur Fuel Oil (VLSFO), and Marine Gas Oil (MGO) all decreased. However, the current market trend remains uncertain, with prices fluctuating, reports Port News.
Natural Gas Withdraws
MABUX Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO – recorded a slight increase of $0.78 (from $73.87 last week to $74.65), still staying well below the SS breakeven mark of $100.00. The index weekly average, on the contrary, decreased by $1.23. In Rotterdam, the SS Spread saw a sharp increase of USD 14.00 ($56.00 versus $42.00 last week), and the weekly average in the port dropped by $2.83. In Singapore, the price gap of 380 HSFO/VLSFO widened by $2.00: from $85.00 last week to $87.00. The weekly average in the port added $7.83. Thus, during the week, the SS Spread stayed below USD 100.00 and showed no consistent directional trend. We expect the irregular changes in SS Spread to persist next week. More detailed information is available in the “Differentials” section of www.mabux.com.
Natural gas withdrawals from storage in Europe are occurring at their fastest pace in six years, driven by persistent winter weather and low temperatures, which have hindered efforts to reduce reliance on hydrocarbons. Since the start of the official winter season on October 1, gas storage levels in the EU and UK have decreased by 83 terawatt hours. This marks the fastest withdrawal rate since 2016 and is more than four times the average for the past decade. Despite the sharp decline, storage levels are still considered comfortable but are notably lower than during the last two winters. As of December 09, European regional storage facilities were 81.54% full (down 3.08% from last week), and gas extraction continues. At the end of week 50, the European gas benchmark TTF showed a moderate decline: minus 3.005 Euros/MWh (45.552 euros/MWh versus 48.557 Euros/MWh last week).
The price of LNG as a bunker fuel at the port of Sines (Portugal) dropped by USD 43 over the week, reaching USD 965/MT on December 10, breaking below the USD 1,000/MT mark. Meanwhile, the price gap between LNG and conventional fuel also narrowed: USD 248 in favor of MGO LS, compared to USD 270 the previous week. On December 10, MGO LS was priced at USD 717/MT in the port of Sines. For further details, visit the LNG Bunkering section on www.mabux.com.
Underpricing Increasing
During Week 50, the MABUX Market Differential Index (MDI) (the ratio of market bunker prices (MBP Index) to the MABUX digital bunker benchmark (DBP Index)) registered underpricing across all bunker fuel types in major hubs: Rotterdam, Singapore, Fujairah and Houston:
- 380 HSFO segment: Weekly average underpricing fell another 1 point in Rotterdam, but rose by 8 points in Singapore, Fujairah, and Houston. The MDI in Rotterdam remained close to 100 percent correlation mark between the market price and the MABUX digital benchmark.
- VLSFO segment: Weekly underpricing increased by 2 points in Rotterdam and 6 points in Fujairah and Houston but decreased by 6 points in Houston. The MDI in Singapore unchanged and remained near the 100% correlation mark of MBP and DBP.
- MGO LS segment: Weekly average undervaluation widened by 2 points in Rotterdam, 5 points in Singapore, and 4 points in Houston, while narrowing by 8 points in Fujairah. The MDI index in Singapore fell below the $100.00 mark, while Rotterdam stayed above it.
The balance of overvalued/undervalued ports remained largely unchanged during the week. Bunker fuel undervaluation recorded across all ports. This trend is likely to continue next week.
