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Crude Tanker Industry: Analysts Revised Target Prices in Week 30

PART:
1 2 3 4
Part 3
Crude Tanker Industry: Analysts Revised Target Prices in Week 30 PART 3 OF 4

Week 30: Bunker Fuel Prices Rose Due to Higher Oil Prices

Week 30

In the previous part, we saw that the demand spiked in the Middle East market and the West African market. The increased demand boosted the Suezmax rates in week 30. However, the fresh demand couldn’t support VLCC rates.

Week 30: Bunker Fuel Prices Rose Due to Higher Oil Prices

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Crude oil prices

In the previous week, crude oil (DBO) prices rose from $48.06 per barrel on July 21 to $52.52 per barrel on July 28, 2017. Oil prices rose due to signs of balance between demand and supply. US stockpiles fell to the lowest level since January. OPEC’s largest oil producer—Saudi Arabia plans to pressure nations that aren’t complying with the production cut.

Bunker fuel prices

On July 27, 2017, average bunker fuel prices were $347 per ton—compared to $339.5 per ton a week ago on July 20, 2017. On the back of a rise in crude oil prices, bunker fuel prices at all of the major ports rose in the last week. According to the Gibson report for week 30, bunker fuel prices at Rotterdam were $301 per ton on July 27, 2017—up from $292 per ton the previous week. Bunker fuel prices at the Port of Fujairah fell to $311 per ton on July 27 from $310 per ton on July 20, according to the same report.

Which companies are affected?

For all of the shipping companies—product tankers, crude tankers, LNG (liquefied natural gas) carriers, and dry bulk carriers—bunker fuel is one of the most significant costs. Bunker fuel costs are closely related to oil prices. A rise in oil prices translates to a rise in bunker fuel prices. Some of the major crude oil tanker companies are Frontline (FRO), Nordic American Tankers (NAT), Teekay Tankers (TNK), and Euronav (EURN). Navios Maritime Partners (NMM) is a major dry bulk shipper. Golar LNG (GLNG) and Teekay LNG Partners (TGP) are LNG carrier companies.

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