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Analyzing Bunker Fuel Prices in Week 12

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Updated

Looking ahead

Previously in this series, we discussed that most of the crude tanker stocks had negative returns in week 12—the week ending March 23, 2018. While VLCC (very large crude carrier) rates rose, Suezmax rates fell below $4,000 per day. In this part of the series, we’ll see how bunker fuel prices fared in week 12.

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Bunker fuel prices

On March 22, 2018, the average bunker fuel price was $423 per ton—compared to $413 per ton on March 15. According to Gibson’s report for week 12, bunker fuel prices at Rotterdam were $358 per ton on March 23—compared to $354 per ton the previous week. Bunker fuel prices at the Port of Fujairah rose to $387 per ton from $375 per ton the previous week, according to the report.

Which companies were impacted?

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

Crude tanker companies operating their vessels in the spot market incur bunker fuel expenses. Of Tsakos Energy Navigation’s (TNP) 65 vessels, only 16 of the vessels operate in the spot market. Nordic American Tankers (NAT) has most of its fleet in the spot market. Out of Nordic American Tankers’ 33 vessels, 28 vessels operate in the spot market.

Crude tanker companies record the cost under voyage expenses. In 2017, Euronav’s (EURN) voyage expenses represented 11.5% of its total operating expenses. In 2017, Teekay Tankers’ (TNK) voyage expenses represented 18% of its total operating expenses.

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