World News
VLSFO Price Spreads Narrow Across Top Four Bunker Hubs
The drop in crude prices over the past month, and the subsequent drop in marine fuels, has left very low sulfur fuel oil (VLSFO) prices at the top bunkering hubs converging to the closest levels on record.
The VLSFO price spread between the most and the least expensive of the top four bunker ports -- Singapore, Rotterdam, Fujairah and Houston -- narrowed by $7.50/mt to $23/mt on Monday, according to Ship & Bunker pricing, the least on record since VLSFO came into widespread use late last year.
The price spreads have narrowed significantly since the start of the year, when the volatile market conditions engineered by the newly-introduced IMO 2020 regulations delivering large price discrepancies between ports.
This narrowing of the spreads, as well as the generally low level of current prices, may prompt shipping companies to be less discriminating about their choice of bunkering port by price, tending more towards picking whichever port is more convenient operationally.
The widest spread on record among the top four ports was on January 6, when VLSFO at Fujairah was trading at $195.50/mt more than Rotterdam's level.
A similar trend can be seen in prices for high sulfur fuel oil (HSFO), with the spread between the most and the least expensive of the top four down to $22.50/mt on Monday, from this year's peak of $98.50/mt on January 8.
HSFO prices have generally been more sluggish to react to the rapid drop in crude over the past month, narrowing their discount to VLSFO and reducing the fuel bill savings enjoyed by vessels with scrubbers fitted.
About Jack Jordan
Jack Jordan is the Managing Editor of Ship & Bunker, the world’s most read marine fuel-focused publication.
He is an experienced financial editor and reporter with a first-class degree in Arabic and Russian, a postgraduate diploma in newspaper journalism and several years' history of covering the oil and shipping industries and capital markets.
Jack is based in London, UK.
About Ship & Bunker
Ship & Bunker is the world's most read publication focused on the marine fuel markets. Completely independent, it is the leading industry authority providing comprehensive daily news, exclusive in-depth features and analysis, along with daily & historical bunker price indications.
To contact the editor responsible for this story email us at editor@shipandbunker.com
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Houston | 552.50 | 0.50 | 682.00 | 4.00 |
| Singapore | 556.50 | 9.00 | 685.00 | 6.50 |
| Rotterdam | 506.00 | 6.00 | 665.00 | 11.00 |
| Fujairah | 548.00 | 7.50 | 750.00 | 3.00 |
| Global 20 Ports Average | 583.50 | 4.00 | 762.50 | 2.50 |
| Global 4 Ports Average | 546.50 | 4.50 | 697.50 | 2.50 |
| Global Average Bunker Price | 632.50 | 2.00 | 811.00 | 1.50 |
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