World News
Aegean: Low Oil Prices Good for Business
Aegean Marine Petroleum Network Inc. [NYSE: ANW] (Aegean) Tuesday said that the drop in oil prices have been a welcome development for its business.
Lower prices are encouraging customers to buy larger quantities, meaning improved vessel utilisation and higher sales volumes, said Aegean President E. Nikolas Tavlarios.
Aegean CFO Spyros Gianniotis elaborated that vessel utilisation, being sales volumes divided by number of vessels, had improved 2.3 percent in the fourth quarter (Q4) of 2014, hitting 523 tonnes per day compared to 511 in the prior quarter.
Tavlarios added that in Q4 quarterly sales volumes surpassed 3 million tonnes for the first time, primarily based on like-for-like growth.
"That kind of demonstrates some of the positives of lower oil prices," said one analyst for Jefferies.
In addition, Tavlarios said "commodity players maybe incentivized to buy in bulk, meaning they will need adequate storage, benefiting Aegean's U.S. East Coast bunkering business and our Fujairah storage facility."
Lower oil prices have also reduced capital requirements for Aegean's business, which will translate into lower interest expenses as less cash is tied up in stock.
The comments were delivered on the company's earnings call to discuss 2014 performance.
On the same call, Tavlarios said sulfur regulations were having a favourable effect of Aegean's business as spreads are better and competitor businesses are disrupted.
Earlier this week, Aegean announced strong Q4 and full year results, saying 2014 was a "landmark year" for the company.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 504.50 | 2.50 | 620.00 | 3.00 |
| Rotterdam | 456.00 | 1.50 | 621.50 | 2.00 |
| Houston | 476.00 | 7.00 | 624.00 | 1.00 |
| Fujairah | 496.50 | 2.00 | 713.00 | 2.50 |
| Global 20 Ports Average | 526.50 | 0.50 | 712.00 | 0.50 |
| Global 4 Ports Average | 483.00 | 2.00 | 644.50 | 0.50 |
| Global Average Bunker Price | 570.50 | 1.50 | 751.00 | 1.00 |
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