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Where Are Bunker Fuel Prices Heading?

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Looking ahead

Previously in this series, we discussed that most of the crude (DBO) tanker stocks fell in the week ending January 19, 2018. VLCC, Suezmax, and Aframax rates rose last week. In this part, we’ll see how crude oil and bunker fuel prices fared in the third week of 2018.

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Oil prices

Last week, Brent crude oil prices touched $70 per barrel on Tuesday following preliminary data published by API that US crude oil inventories fell. However, oil prices dropped on Friday, breaking a four-week rally due to the growing concern over re-emerging US production growth in 2018. Brent crude oil prices closed at $68.6 per barrel on January 19, 2018, compared to $69.8 per barrel a week ago.

Bunker fuel prices

On January 18, 2018, the average bunker fuel price was $434 per ton compared to $437 per ton on January 11, 2018. According to the Gibson report for week three, bunker fuel prices at Rotterdam were $367 per ton on January 18, 2018, compared to $370 per ton the previous week. Bunker fuel prices at the Port of Fujairah remained constant at $386 per ton from the previous week, according to the same report.

Which companies were impacted?

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

Some of the major crude oil tanker companies are Nordic American Tankers (NAT), Frontline (FRO), Gener8 Maritime Partners (GNRT), 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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