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Why Did Bunker Fuel Prices Rise in Week 46?

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Crude oil prices 

Brent crude oil prices ranged from $44.4 per barrel to $46.9 per barrel in week 46—the week ending November 18, 2016. On average, prices were 5% higher than they were in the same period last year. Crude oil (DBO) prices impact crude oil demand, freight rates, and bunker fuel prices.

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Oil demand and tanker rates

Lower crude oil prices encourage countries to import larger quantities of cheap oil to store for future use. It increases crude oil tanker demand and has a positive impact on tanker rates. Higher freight rates benefit the crude oil tanker industry.

Bunker fuel prices

Bunker fuel prices, the largest cost of running a ship, correlate with crude oil prices. For the week ending November 18, 2016, the average bunker fuel price was $302–$311 per ton compared to $308–$313 per ton in the previous week. Bunker fuel prices are 9% higher than they were in the same period in 2015.

In terms of major ports, bunker prices at Rotterdam were $241–$250 per ton compared to $245–$252 per ton in the previous week. At the Port of Fujairah, bunker prices were $266–$278 per ton compared to $271–$275 per ton in the previous week.

Who’s affected?

Lower bunker prices reduce operating costs and boost profits for companies such as Frontline (FRO), Teekay Tankers (TNK), Tsakos Energy Navigation (TNP), Nordic American Tankers (NAT), DHT Holdings (DHT), Gener8 Maritime (GNRT), Navios Maritime Midstream Partners (NAP), and Euronav (EURN).

Bunker fuel prices also impact the costs for product tankers and dry bulk shipping companies such as Navios Maritime Partners (NMM). Liquefied natural gas carrier companies such as GasLog (GLOG) and Golar LNG (GLNG) are also impacted by bunker fuel pricing

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