World News
OW Bunker: Q3 Loss "Was Very Disappointing"
Falling oil prices hurt OW Bunker's bottom line in the third quarter of the year, resulting in a $5.8 million loss, the bunker supplier has reported.
"Overall the third quarter result was very disappointing," said CEO Jim Pedersen.
"The fall in the oil price in particular in September was exceptional and led to a USD 24.5 million unrealised risk management loss.
"The margin pressure seen in the second quarter continued, but seems to have stabilised."
The company reduced its forecast for volume growth in 2014 to 6 percent, compared with a previous estimate of 10 percent as it moved its focus to higher margin business.
In a presentation to shareholders, OW Bunker notes that weak fuel prices have led to customers delaying bunker purchases and supplier discounts have fallen, leading the company to shift from term contract to spot volume.
However, demand improved in October, due partly to the need for customers to catch up with purchases.
Volumes were still up year-over-year, hitting 8.01 million tonnes in Q3 compared with 7.82 million tonnes in the same quarter last year, but gross profit per tonne dropped to $3.62 from $7.65.
KPI Bridge Oil broker and trader Tim Bonett recently wrote that the downward movement of oil prices seems to be slowing.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 647.00 | 8.50 | 779.00 | 29.50 |
| Rotterdam | 608.00 | 11.00 | 764.50 | 24.50 |
| Houston | 636.50 | 8.00 | 807.50 | 5.00 |
| Fujairah | 649.50 | 4.00 | 888.50 | 11.50 |
| Global 20 Ports Average | 665.50 | 6.50 | 870.50 | 14.50 |
| Global 4 Ports Average | 635.50 | 3.50 | 810.00 | 17.50 |
| Global Average Bunker Price | 725.00 | 2.50 | 925.50 | 8.00 |
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