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Where Did Bunker Fuel Prices Head in Week 29?

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Bunker fuel prices

Previously in this series, we saw that crude tanker stocks fell in week 29 (week ending July 20). However, VLCC (very large crude carrier) and Suezmax rates rose. In this part, we’ll see how bunker fuel prices fared last week.

On July 12–19, bunker fuel’s average price fell to $478.5 per ton from $504 per ton. According to Gibson, the bunker fuel prices at Rotterdam fell to $416 per ton from $431 per ton. The bunker fuel prices at the Port of Fujairah fell to $441 per ton from $464 per ton.

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Which companies were impacted?

Ships that transport commodities, like liquefied natural gas carriers, product tankers, dry bulk carriers, and crude oil (DBO) tankers, incur bunker fuel costs. Bunker fuel prices are closely related to oil prices.

Crude tanker companies that operate vessels in the spot market also incur bunker fuel expenses. Of Tsakos Energy Navigation’s (TNP) 65 vessels, only 16 operate in the spot market. Meanwhile, most of Nordic American Tankers’ (NAT) fleet operates in the spot market. Of Nordic American Tankers’ 33 vessels, 28 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. Teekay Tankers’ (TNK) voyage expenses represented 18.0% of its total operating expenses.

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