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Where Are Bunker Fuel Prices Headed?

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Bunker fuel prices

Previously in this series, we noted that most of the crude tanker stocks rose in week 21, which ended on May 25. In this part, we’ll see how bunker fuel prices fared in week 21.

On May 24, the average bunker fuel price was $512.25 per ton compared to $509.25 per ton on May 17. According to Gibson’s report for week 21, the bunker fuel prices at Rotterdam were $441.0 per ton on May 24 compared to $442.0 per ton on May 17. The bunker fuel prices at the Port of Fujairah rose to $469.0 per ton from $461.0 per ton on May 17.

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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 (DBO) tankers. Bunker fuel prices are closely related to oil prices.

Crude tanker companies that operate 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. Of Nordic American Tankers’ 33 vessels, 28 vessels operate in the spot market.

Crude tanker companies record these costs as 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 18.0% of its total operating expenses.

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