World News
Report: Favorable Purchasing Environment and Bunker Fuel Price Declines Through to 2017
An IBISWorld report last week predicts that bunker fuel will continue to experience price declines during the next three years.
Purchasing Bunker Fuel, Procurement Category Research Report posits that over the three years to 2017, crude oil production is forecast to continue rising at a significant rate, "exceeding demand levels and causing the world price of crude oil and, thus, suppliers' operating costs, to decrease further," states IBISWorld procurement analyst Ian Buchanan.
"Consequently, buyers are expected to benefit from further declines in the price of bunker fuel."
The report outlines how strong growth in crude oil production has helped drive operating costs down for suppliers between 2011 and 2014.
However during the same period, the report noted that oil prices, and consequently bunker prices, were highly volatile making budgeting difficult for buyers.
Nonetheless, IBISWorld gives bunker a buyer power score of 3.9 out of 5, indicating a favorable purchasing environment.
"The homogenous nature of the product allows buyers to compare supplier offerings more efficiently and eases the supplier selection process, reducing searching costs for buyers," says Buchanan.
In February ESAI Energy LLC (ESAI Energy) predicted in its Medium and Long-term Global Oil Outlook briefing that the current oil glut will not be fully rebalanced until 2018.
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 |
Popular Now More
-
Apr 23Initial Ship & Bunker analysis shows ships would need to use between 17.6% and 23.3% biofuel in B100 terms to avoid penalty charges in 2028. -
Apr 24Suppliers in South Korea are already shifting to the use of MFMs, and barge fees are likely to rise in the country as a result, a local source tells Ship & Bunker. -
Apr 25Ship & Bunker's latest global average bunker price forecast shows a signifcant drop in expected average prices compared to just 3 months ago.