World News
Caribbean Bunker Player Cuts Deal with "Major" Trading Company
U.S.-based NuStar Energy LP [NYSE:NS] (NuStar) says it has signed an agreement with a "major fuel oil trading company" that will supply NuStar with bunker fuel to sell to customers in St. Eustatius and the Caribbean.
NuStar will create a "back-to-back" trading model, buying fuel from the large supplier, which it did not name.
The company said the new model would lower its working capital expenses by $40 to $50 million by reducing the amount of money tied up in inventory, lower its exposure to price volatility, and help it manage operating expenses better.
"This agreement is a very positive step in our efforts to strengthen the bunker marketing operations within our fuels marketing segment, which has been impacted by weak demand and difficult market conditions," said President and CEO Curt Anastasio.
"This agreement allows us to remain in a competitive position as a bunker fuel marketer, while reducing our exposure to price risks and dramatically reducing our working capital expenses related to our bunker marketing operations.
"We also believe that it creates opportunities to grow our fuel oil business in the Caribbean."
NuStar's bunker operations lost money in the second quarter of this year, with the company blaming low worldwide fuel demand and increased supply in the Caribbean and U.S. Gulf Coast.
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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