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Week 51: Crude and Bunker Fuel Prices

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Week 51

Previously in this series, we discussed that crude tanker stocks gave mixed returns in the week ending December 22, 2017. VLCC (very large crude carrier) rates rose, while Suezmax and Aframax rates fell. In this part, we’ll see how crude oil and bunker fuel prices fared in week 51.

Oil prices

Crude oil prices rose from last week after a continued shutdown of the Forties crude oil pipeline along with diminishing US crude stockpiles. According to EIA data, US crude inventories fell for the fifth consecutive week—down by 6.5 MMbbls for the week ending December 15, 2017. Brent crude oil prices rose to $64.9 per barrel on December 22, 2017, from $63.3 per barrel on December 15, 2017.

Bunker fuel prices

On December 22, 2017, the average bunker fuel price was $413 per ton—compared to $406 per ton on December 15, 2017. According to the Gibson report for week 51, bunker fuel prices at Rotterdam were $353 per ton on December 22, 2017—compared to $342 per ton on December 15, 2017. Bunker fuel prices at the Port of Fujairah fell to $370 per ton from $369 per ton the previous week, according to the same report.

Importance of bunker costs

Companies that transport commodities on ships incur bunker fuel costs. These companies are from various industries—LNG (liquefied natural gas) carriers, product tankers, dry bulk carriers, and crude tankers. Bunker fuel prices are closely related to oil prices.

Some of the major crude oil tanker companies are Teekay Tankers (TNK), Frontline (FRO), Nordic American Tankers (NAT), and Euronav (EURN). GasLog (GLOG) and Hoegh LNG Partners (HMLP) are LNG carrier companies. Navios Maritime Partners (NMM) is a major dry bulk shipper.

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