Bunker sellers may be differing on price expectations more than normal. File Image / Pixabay
Bunker market volatility in the wake of Russia's invasion of Ukraine shows no signs of letting up, with buyers continuing to see suppliers offering a wide spread of prices for the same grade of fuel at the same port.
While Ship & Bunker data shows market conditions have improved significantly since those witnessed earlier in the year, where extreme volatility in the underlying crude market made it exceptionally challenging for suppliers to price their product, buyers continue to see healthy double-digit spreads across like-for-like quotes.
The spread between suppliers would partly depend upon their stock levels and hedging positions, Paul Hardy, head of business development at NSI, told Ship & Bunker this week.
"Dates, though, remain the key factor, with prompt paying a premium and deliveries into August able to take advantage of the backwardation," he said.
"The reality is, in some markets the difference between a prompt enquiry and one later in next month can be upwards of $70/mt.
This year has seen record moves in VLSFO prices with energy markets overturned by the Russian crisis.
Ship & Bunker's G20 index of VLSFO prices at 20 leading ports worldwide has seen a spread of $497/mt between the low of $628.50/mt on January 3 and the high of $1,125.50/mt seen on June 14.
In contrast, 2021 saw a $220.50/mt spread between its G20 VLSFO low and high, and 2020 - a year that had to contend with both the IMO 2020 transition and a subsequent COVID-driven oil price collapse - saw a spread of $484/mt.