Oil Prices Are below $45: What about Bunker Fuel Prices?

Week 24

Only Aframax rates rose, while VLCC and Suezmax rates fell. Suezmax rates reached new year-to-date lows. In this part, let’s see how bunker fuel prices fared in week 24. Oil prices are still below $45 per barrel. They’re trading at a seven-month low, which impacts bunker fuel prices.

Oil Prices Are below $45: What about Bunker Fuel Prices?

Bunker fuel costs

Bunker fuel is one of the most vital cost components for crude tanker companies including Nordic American Tankers (NAT), Teekay Tankers (TNK), Tsakos Energy Navigation (TNP), and Euronav (EURN). Bunker fuel costs are closely related to oil prices (DBO). A fall in oil prices translates to a fall in bunker fuel prices.

Bunker fuel costs

On June 15, 2017, the average bunker fuel price was ~$317.5 per ton—compared to $323 per ton a week ago. According to the Gibson Weekly Report, bunker fuel prices at Rotterdam were $273 per ton on June 15, 2017—compared to $279 per ton on June 8, 2017, and $273 per ton the previous month. Bunker fuel prices at Fujairah were $296 per ton on June 15—down from $300 per ton last week and lower than $298 per ton the previous month, according to the same report.

Bunker fuel is also the most expensive cost component for LNG carriers and the dry bulk shipping industry. Some of the major LNG carriers are Gaslog (GLOG), Golar LNG (GLNG), and Teekay LNG (TGP). Navios Maritime Partners (NMM) is a major dry bulk shipper.