In 2013, marine fuel prices have displayed a general downward trend, though shipowners would agree that fuel prices are still expensive today, made worse by sluggish freight rates failing to offset expenses.
Exactly a year ago on 10 January 2013, the benchmark Singapore 380 cst bunker price was indicated at $638 per metric tonne (pmt), 5.7% higher compared to yesterday's indication of $601.50 pmt, according to data from Ship & Bunker.
A look at the price trend last year showed a spike for Singapore 380 cst to $663.50 pmt in February. Since then, the market weakened with prices staying largely below $625 pmt since mid-April, but rather firmly above $600 pmt. Market volatility was also rather mild at an average of $25 spread for about the last three quarters of 2013.
Singapore 380 cst opened this year with a price of $615.50 pmt, and the market has came down rather generously to $601.50 pmt yesterday.
While the bunker market has softened, most owners are not expecting fuel costs to continue to come down in the foreseeable years ahead as the prices of crude oil are projected to stay firm.
According to Moody's Investors Service's recent report, global oil development including oil sands and shale will be supported by high oil prices in 2014, though oversupply could bring prices down slightly from historically strong levels. “Prices could fall if Chinese GDP growth slows significantly and Opec members go above targeted production of 30m barrels a day,” the ratings agency's report said.
Meanwhile, Singapore-based bunker traders spoken to by Seatrade Global shared that bunker prices are expected to rise with fuel supplies tightening in the weeks leading to Chinese New Year.
Every year, China would seek to soak up as much oil as possible over the few weeks ahead of the country's annual week-long holiday, with this year's period being 31 January to 6 February. Tight bunker fuel supplies are anticipated to hit the Asian market until after Chinese New Year, and prices would rise in tandem with the tight market.
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