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Week 45: Crude Tanker Industry Update

PART:
1 2 3 4
Part 3
Week 45: Crude Tanker Industry Update PART 3 OF 4

Oil Prices Reach a 2.5-Year High: What about Bunker Fuel Prices?

Week 45

Previously in this series, we saw that the crude (DBO) tanker index fell in week 45 (week ending November 10, 2017). VLCC (very large crude carrier) and Suezmax rates fell, while Aframax rates rose. In this part of the series, we’ll see how crude oil and bunker fuel prices fared in week 45.

Oil Prices Reach a 2.5-Year High: What about Bunker Fuel Prices?

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Crude oil prices

Crude oil prices gained more strength from the previous week. The prices rose to the highest level in last two and half years. The recent spike in prices followed an unexpected anti-corruption crackdown in Saudi Arabia. It raised concerns about instability in Saudi Arabia, which added a geopolitical risk premium. According to Reuters, Saudi Arabia plans to cut its crude oil exports in December. Brent crude oil prices rose from $60.62 per barrel on November 3, 2017, to $63.9 per barrel on November 10, 2017.

Bunker fuel prices

On November 10, 2017, the average bunker fuel price was $417 per ton—compared to $398 per ton on November 3, 2017. According to the Gibson report for week 45, the bunker fuel prices at Rotterdam were $361 per ton on November 10, 2017—compared to $349 per ton the previous week. The bunker fuel prices at the Port of Fujairah rose to $384 per ton on November 10—compared to $363 per ton on November 3, 2017, according to the same report.

Which companies are impacted?

Industries that transport products on ships incur bunker fuel costs. These industries are LNG (liquefied natural gas) carriers, product tankers, dry bulk carriers, and crude oil tankers. Bunker fuel prices are closely related to oil prices. A rise or fall in oil prices translates to a rise or fall in bunker fuel prices.

Some of the major crude oil tanker companies are Nordic American Tankers (NAT), Gener8 Maritime Partners (GNRT), Euronav (EURN), and Teekay Tankers (TNK). GasLog and Hoegh LNG Partners (HMLP) are LNG carrier companies. Navios Maritime Partners (NMM) is a major dry bulk shipper.

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