World News
Bunker 'Fire Sales' Expected After Slump in Crude: NSI
Significant price cuts can be expected in some bunker markets after Tuesday's drop in crude prices, according to brokerage NSI.
Brent crude futures sank by $3.77/bl to $73.75/bl on Tuesday, the lowest closing price since December.
This may prompt some suppliers that have bought cargoes against previous higher prices to sell products in haste, NSI's Paul Hardy said in a note to customers on Wednesday.
"In other markets pricing off Singapore with suppliers that are unhedged, the recent drops in crude will mean there will most likely be fire sales in order to get expensive product sold," Hardy said.
"It is important to know the individual suppliers' hedging position and if they are floating down with the market."
Beyond looking for these suppliers motivated to sell, buyers should also be looking at hedging opportunities, he added.
"If we look at opportunities for VLSFO, then FFPs for Q4 2024 and then Q1 2025 are starting to look more and more attractive with the shape of the market," Hardy said.
"All eyes on $70 on Brent, where the next support is and would be a big sign for further weakness."