World News
Low Oil Price Weighs on LNG Bunker Decisions
BIMCO's Watchkeeper column Wednesday said the recent, unexpected drop in oil prices may "provoke a startled rethink" of plans for the use of liquified natural gas (LNG) bunkers.
"If fuel is to be half the price it was a year ago, is it worth paying rather more for a vessel being marketed as an ECON ship?" asked the article.
"There are 120 LNG fuelled ships, not counting those LNGCs, in operation and on order, and the present change of circumstances might well cause a pause in the pace of ordering as people go back to the drawing board."
The low oil price is likely to alter the calculations upon which the shipping industry is basing decisions about LNG bunkers, it said.
Furthermore, moves by classification societies to introduce "gas ready" notations, such as the announcement by ABS this week, may give shippers an option to defer full committal to LNG in the short term.
Oil prices have fallen dramatically in recent months, with some predicting they could stabilise at around $60 per barrel.
But it is unclear whether low oil prices are here to stay, with many factors at play difficult to predict, said the Watchkeeper article.
Low oil prices raise other questions, too, said the article, such as whether or not slow steaming remains the best course of action.
Maersk Line recently said it expected slow steaming to remain a feature of the box shipping market despite oil prices.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 644.50 | 1.00 | 782.00 | 10.50 |
| Rotterdam | 590.00 | 10.50 | 750.50 | 9.00 |
| Houston | 608.50 | 11.00 | 777.00 | 10.50 |
| Fujairah | 643.00 | 0.50 | 891.50 | 3.50 |
| Global 20 Ports Average | 658.50 | 3.50 | 848.50 | 2.50 |
| Global 4 Ports Average | 621.50 | 5.50 | 800.50 | 3.00 |
| Global Average Bunker Price | 713.00 | 1.50 | 890.00 | 0.50 |
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