World News
MGO Premium Relative to HFO Getting Significantly Larger [Graph]
![MGO Premium Relative to HFO Getting Significantly Larger [Graph]](https://shipandbunker.cdn.speedyrails.net/a/img/_fl_39d1d69e25ffd93f880778e2f125e8de.v.630.jpg)
The premium for MGO over HFO bunkers, in percentage terms, has grown significantly larger since the collapse of oil prices at the end of 2014, data from Ship & Bunker shows.
Looking at the average price of bunkers across Singapore, Houston, Rotterdam, Fujairah, and Gibraltar, the price for IFO380 was $600 per metric tonne or more up until July 2014, and has since fallen to as low as $109 pmt in January 2016.
This dramatic fall in bunker prices has meant the premium for MGO over HFO in dollar terms has also fallen substantially, from as much as $380 pmt to as low as $180 pmt.
As such, the relationship between the relative prices has been somewhat masked.
However in percentage terms, in the years leading up to the late 2014 collapse of oil and bunker prices, MGO was priced at between 40 and 60 percent above IFO380.
Since then, MGO's average price across the five ports has been as much as 160 percent above the ports' average IFO380 price.
Over the past 12 months MGO has averaged around double the IFO380 price.
Last year Ship & Bunker predicted that, in the in future, MGO is going to be more expensive relative to crude, and HFO is going to be cheaper.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 565.50 | 6.00 | 661.50 | 4.00 |
| Rotterdam | 510.00 | 2.00 | 661.00 | 2.00 |
| Houston | 548.00 | 2.50 | 666.50 | 0.50 |
| Fujairah | 555.50 | 5.00 | 746.00 | 2.50 |
| Global 20 Ports Average | 582.50 | 1.50 | 753.00 | 1.50 |
| Global 4 Ports Average | 544.50 | 3.00 | 683.50 | 1.00 |
| Global Average Bunker Price | 631.00 | 2.50 | 803.50 | 2.00 |
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