How Bunker Fuel Prices Moved after OPEC Extended Production Cuts
Previously in this series, we saw that the crude (DBO) tanker index rose in week 48, which ended December 1, 2017. VLCC (very large crude carrier) rates fell, while Suezmax rates rose. In this part of the series, we’ll see how crude oil and bunker fuel prices fared in week 48.
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Crude oil prices fell in the middle of week 48 ahead of the OPEC meeting but recovered some losses as OPEC extended production cuts until the end of 2018. As the market was already expecting a nine-month extension, it was already priced in, and crude prices saw little movement after the announcement. Brent crude oil prices fell to $62.6 per barrel on December 1, 2017, from $63.5 per barrel on November 24, 2017.
Bunker fuel prices
On November 30, 2017, the average bunker fuel price was $407 per ton compared to $413 per ton on November 23, 2017. According to the Gibson report for week 48, bunker fuel prices at Rotterdam were $346 per ton on November 30, 2017, compared to $353 per ton the previous week. Bunker fuel prices at the Port of Fujairah remained constant at $373 per ton on November 30, 2017, according to the same report.
Which companies were affected?
Industries that transport commodities 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.
Some of the major crude oil tanker companies are Nordic American Tankers (NAT), Frontline (FRO), Gener8 Maritime Partners (GNRT), and Euronav (EURN). GasLog (GLOG) and Hoegh LNG Partners (HMLP) are LNG carrier companies. Navios Maritime Partners (NMM) is a major dry bulk shipper.