According to the weekly outlook of Marine Bunker Exchange (MABUX) for fuel prices, world bunker indexes continued their firm decline over the last week, despite expectations of sharp irregular changes caused by the price cap imposed by the European Union on Russian oil.
The 380 HSFO index fell to US$468.48/MT, the VLSFO index, in turn, decreased to US$684.42/MT, while the MGO index declined to US$1,007.49/MT.
Global Scrubber Spread (SS) – the price differential between 380 HSFO and VLSFO – showed a slight growth over Week 49, reaching US$215.94.
The Rotterdam SS Spread, on the contrary, resumed its decline to US$180. In Singapore, the 380 HSFO/VLSFO price differential also narrowed by US$9 to US$252.
“It is expected that SS Spread should not have any sustainable direction next week,” commented a MABUX official.
Europe’s natural gas demand in November fell by nearly a quarter compared to the five-year average for the month. High prices are clearly driving demand destruction, with industrial demand seeing the largest decrease. Despite that, cold weather and lower-than-
normal nuclear and wind power generation are sending gas prices climbing.
The price of LNG as bunker fuel at the port of Sines in Portugal rose to US$2,610/MT on 5 December.
Thus, the price of LNG exceeds the cost of the most expensive traditional bunker fuel grade by US$1,603, on 5 November, the price of MGO LS at the port of Sines was quoted at US$1,007/MT.
Over Week 49, the MDI index (comparison of MABUX market bunker prices (MBP Index) vs MABUX digital bunker benchmark (DBP Index)) showed an underestimation of 380 HSFO fuel grade in all four selected ports. The underprice premium increased slightly, in Rotterdam – minus US$127, Singapore – minus US$133, Fujairah – minus US$193 and Houston – minus US$69.
In the VLSFO segment, according to MDI, Singapore and Fujairah remained overvalued, plus US$49 and plus US$25, respectively. In Rotterdam and Houston, this fuel grade was underestimated by an average of minus US$46 and minus US$5. Underpricing decreased, while overpricing rose slightly.
In the MGO LS segment, MDI continued to register fuel underpricing in two out of four selected ports, Rotterdam – minus US$67 and Houston – minus US$55. Singapore and Fujairah remained overpriced, plus US$8 and plus US$146, respectively.
“The price cap on Russian oil, imposed by the European Union on December 05, has not yet had a significant impact on world bunker indices so far. The Global fuel market is waiting for Russia’s reaction to the imposed restrictions. We expect the downward trend in the
global bunker market to continue next week,” commented Sergey Ivanov, director of MABUX.
