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.
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.
Despite strong gains in crude oil prices, ConocoPhillips's stock price rose 0.06% from $52.96 to $52.99 last week.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.