VLSFO bunker prices at major bunkering hubs look set to remain in the $600's until 2024, based on the latest crude price forecasts from market watchers Goldman Sachs and Morgan Stanley.
Morgan Stanley last week raised its Brent forecast to $85/bbl for Q3 and $82.50/bbl for Q4.
Goldman Sachs has a year end 2023 Brent forecast of $86/bbl, although last week warned lower OECD commercial stocks could lift this price to $88/bbl.
Data from Ship & Bunker's G20 bunker price index, that tracks bunker prices in 20 key global bunkering hubs, shows over the past 12 months VLSFO prices have closely tracked Brent.
Converted at 7.53 blbs/mt, Brent has averaged $630/mt during this time, while the G20-VLSFO price has averaged $657/mt - putting the premium for VLSFO over Brent at 4%
MGO has averaged $956/mt over the 12 month period ending August 25, 2023, a premium to Brent of 52%, while HSFO has averaged $490/mt, a discount to Brent of 22%.
If Brent holds true to the forecasted value range of 82.50/bbl to $88/bbl, and VLSFO remains at its premium of around 4% to Brent, this would indicate VLSFO bunkers for the remainder of 2023 will be priced between $648/mt and $691/mt, MGO between $943/mt and $1006/mt, and HSFO between $483/mt and $515/mt.
Brent today closed at $83.36/bbl.