Previously in this series, we discussed that most of the crude tanker stocks gave positive returns in week 11—the week ending March 16, 2018. VLCC (very large crude carrier) and Suezmax rates fell last week. In this part of the series, we’ll see how crude oil and bunker fuel prices fared in week 11.
Bunker fuel prices
On March 15, 2018, the average bunker fuel price was $413 per ton—compared to $411 per ton on March 8. According to Gibson’s report for week 11, bunker fuel prices at Rotterdam were $354 per ton on March 15—compared to $347 per ton the previous week. Bunker fuel prices at the Port of Fujairah dropped to $375 per ton from $381 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 them 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.