Bunker Fuel and Crude Oil Prices in Week 27
In the previous part of this series, we saw that Suezmax and VLCC (very large crude carrier) rates rose, while Aframax rates reached a fresh year-to-date low in the previous week. In this part, we’ll focus on the cost side—bunker fuel prices.
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Crude oil prices
Brent crude oil prices fell to $46.70 per barrel on July 7, 2017, from $47.90 per barrel on June 30, 2017. The fell for week 27 came on the back of rising US drilling activity and production. That offset a larger-than-expected fall in stockpiles. US crude oil production rose 88,000 barrels per day last week. US gasoline inventories fell 3.7 million barrels.
Bunker fuel costs
On July 6, 2017, the average bunker fuel price was ~$333 per ton compared to $328 per ton a week ago. According to the Gibson report for week 27, bunker fuel prices at Rotterdam were $285 per ton on July 6, 2017, which was unchanged from the previous week. Similarly, bunker fuel prices at the Port of Fujairah remained unchanged at $303 per ton, according to the same report.
Which companies are affected?
For all the shipping companies— product tankers, crude tankers, dry bulk carriers, and LNG (liquefied natural gas) carriers—bunker fuel is one of their most significant costs. Bunker fuel costs are closely related to oil prices (DBO). A rise in oil prices translates to a rise in bunker fuel prices. Some of the major crude oil tanker companies are Frontline (FRO), DHT Holdings (DHT), Nordic American Tankers (NAT), and Euronav (EURN). Navios Maritime Partners (NMM) is a major dry bulk shipper. GasLog (GLOG), Golar LNG (GLNG), and Teekay LNG Partners (TGP) are LNG carrier companies.