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Bunker savings still there for the taking

Bunker savings still there for the taking
There has been tremendous savings on bunker bills for shipowners for about nine months since October last year, when bunker prices started falling steadily in line with the weaker crude oil market.

Over the course of this year, the price of benchmark grade Singapore 380 cst has stayed below $400 per metric tonne (pmt), with an average that is almost halved of what it was a year ago.

Last Friday, the price of Singapore 380 cst bunker was indicated at $327.50 pmt, a 45.6% discount over the $602.50 pmt level recorded exactly a year ago, according to data from Ship & Bunker. Such levels of fuel prices have indeed helped to significantly offset the low freight rate environment of the shipping market, cushioning the impact for many operators.

Speaking to Taipei-based intra-Asia carrier Wan Hai Lines recently, the company said it managed to save around $108m on an average bunker price of $330 pmt in the first half, compared to the price of $600 pmt in the year-ago period. And many other operators would have reaped considerable savings, depending on their fuel consumption.

To date, there have been few analysts reports and predictions pointing to a surge in oil prices in the near-term, though they have said that oil prices are unlikely to stay low over a prolonged period of time due mainly to the undying energy appetite for a growing global population.

Between January to June this year, the price of Singapore 380 cst bunker has moved up compared to the previous corresponding period, amid the rather tame volatility during the six-month period. The bunker price has risen by 5.8% over the first six months, Ship & Bunker data showed.

However, fuel prices have decreased from $377.50 pmt seen on 2 June to $327.50 pmt on 3 July. While there is no crystal ball to know which direction the bunker market will take for the rest of this year, prices at current levels are not something that ship operators have much to complain about.