Singapore is seeing a sharp recovery in its bunker prices. File Image / Pixabay
The price of VLSFO in Singapore, the world's largest bunkering hub, has advanced above $500/mt for the first time in almost a year.
VLSFO at Singapore gained $6/mt to $500.50/mt on Tuesday, according to Ship & Bunker pricing, the highest level since February 21, 2020.
Prices have surged by almost $50/mt since the end of last month with a strong start to the year for crude prices. Brent crude futures gained $5.21/bl over the same period on renewed optimism over the effect of improving demand and OPEC cuts on balancing the market.
While the bunker industry will largely welcome the news, there may be a note of caution in its optimism. Last year several senior industry figures warned that a sharp increase in bunker prices this year could lead to access to credit becoming more difficult for some.
Bunker prices followed crude into a collapse in February and March of last year as the COVID-19 pandemic crushed demand expectations and internal OPEC squabbles cast doubt on their willingness to impose greater output cuts.
The Singapore VLSFO price hit a low of $206.50/mt last year on April 22, according to Ship & Bunker pricing. That was $228.50/mt below the HSFO price in Singapore on the same day of 2019.