Singapore Bunkers Swing to 10 Year Low as Global IFO380 Prices Approach $200

Oil prices Monday made another big swing into the red

Following a brutal day for global commodity markets Monday, data from Ship & Bunker shows marine fuel prices in the world's biggest bunker ports showed little resistance to what players are calling China's "Black Monday" which, unsurprisingly, continued to follow plummeting crude prices into the red.

Ship & Bunker price data for Singapore shows that on Monday the world's most popular grade of fuel, IFO380, was $212 per metric tonne (pmt), having fallen $18.50 since Friday and $40 week-on-week.

Some indications recorded by Ship & Bunker Monday were as low as $205 pmt.

Prices at the port have fallen a massive $375.50 pmt, or 64 percent, since the $587.50 pmt recorded for 380 cSt material exactly one year ago.

A report quoting Reuters data noted that prices were now at their lowest in over 10 years, having assessed Singapore IFO380 prices as marginally lower on Monday at $209 pmt, the lowest since March 4, 2005.

Platts, meanwhile, assessed Monday IFO380 prices in Singapore at $208 pmt, saying it was the lowest since their assessment of $207.50 pmt on March 2, 2005.

"It's not surprising with crude hitting new lows as well. Now we're looking if it can break the $200 a tonne mark," a Singapore-based trader was quoted as saying.

Demand was also reported to be low on Monday, suggesting buyers felt there was still more room for prices to tumble.

Elsewhere, prices fell to new multi-year lows at other major ports, with IFO380 in Rotterdam, Houston, and Fujairah all taking similar downward swings of between $6 and $20.50 pmt to put the product at between $211 and $215 pmt across the four ports.

Cheap Oil, Cheaper Bunkers

Ship & Bunker data also suggests that the recent fall is bunker prices is still outpacing crude's decline.

Based on a Brent bbl to metric tonne (mt) conversion of 7.53 bbl pmt, over the last three years the average IFO380 bunker price across Singapore, Rotterdam, Houston, and Fujairah has, until recent weeks, been between 69 and 80 percent of the Brent crude price on any given day.

The average price has been about 74 percent of the price of Brent in that time.

On Monday Brent closed at 42.69/bbl, or $321.45 pmt, and the average IFO380 price across the four ports was $212.88 pmt, meaning it was 66.2 percent of the Brent closing price.

The fact that bunkers are getting cheaper relative to crude was also discussed in an analysis by Ship & Bunker earlier this month.