Crude oil prices
Brent crude oil prices ranged from $49.7 per barrel to $51.5 per barrel in week 43, the week ended on October 28, 2016. On average, prices were 5% higher than they were in the same period last year.
Crude oil (DBO) prices impact crude oil demand, affecting freight rates and bunker fuel prices.
Oil demand and tanker rates
Lower crude oil prices encourage countries to import larger quantities of cheap oil to store for future use, increasing crude oil tanker demand and positively affecting 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 ended October 28, 2016, the average bunker fuel price was $321–$325 per ton. Bunker fuel prices are 13% higher than they were in the same period in 2015, when they were $321–$324 per ton.
In terms of major ports, bunker prices at Rotterdam were $266–$272 per ton, compared to $266–$270 per ton in the previous week. At the Port of Fujairah, bunker prices were $287–$295 per ton, compared to $290–$295 per ton in the previous week.
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 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.