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Week 38: Crude Tanker Industry Update

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Part 3
Week 38: Crude Tanker Industry Update PART 3 OF 4

Crude and Bunker Fuel Prices Rose in Week 38

Week 38

In the previous part of this series, we saw that VLCC (very large crude carrier) rates rose due to higher demand in the Middle East market. On the other hand, Suezmax and Aframax rates fell in week 38 (week ending September 22, 2017). In this part, we’ll see how crude oil prices and bunker fuel prices fared in week 38.

Crude and Bunker Fuel Prices Rose in Week 38

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Crude oil prices

Crude oil (DBO) prices rose in week 38 as investors shrugged off news of growing US crude production. Investors focused on OPEC’s upcoming meeting. Crude oil production rose 9.3% week-over-week. On Friday, OPEC will conduct a meeting in Vienna to discuss a potential extension of ongoing production cuts.

The West Texas Intermediate crude oil price rose to $50.66 per barrel on September 22 from $49.89 per barrel on September 15, 2017. Brent crude oil prices rose from $55.48 per barrel on September 15 to $56.86 per barrel on September 22.

Bunker fuel prices

On September 21, 2017, the average bunker fuel price was $385 per ton—compared to $377 on September 14, 2017. According to the Gibson report for week 38, bunker fuel prices at Rotterdam were $324 per ton on September 21, 2017—similar to the previous week. Bunker fuel prices at the Port of Fujairah rose to $340 per ton on September 21 from $338 per ton on September 14, according to the same report.

Which companies were impacted?

Product tankers, LNG (liquefied natural gas) carriers, dry bulk carriers, and crude tankers all transport their products on ships. For all of these shipping companies, bunker fuel is one of the most important costs. Bunker fuel prices are closely related to oil prices. Any rise in oil prices translates to a rise in bunker fuel prices.

Some of the major crude oil tanker companies are DHT Holdings (DHT), Navios Maritime Midstream Partners (NAP), Teekay Tankers (TNK), Gener8 Maritime Partners (GNRT), and Euronav (EURN). Navios Maritime Partners (NMM) is a major dry bulk shipper, while Golar LNG (GLNG) and Teekay LNG Partners (TGP) are LNG carrier companies.

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