London: Following the breach of the $700 threshold for 380 cSt bunker fuel in Shanghai last Friday, Asian bunker prices continued their upward march in the early part of this week. Bunkers hit just over $720 in Shanghai yesterday, up more than 6% on the week and representing a spread to about $119 over the last month. In Singapore, the story was similar although absolute prices were a little lower. Yesterday they hit $695 before easing back to just under $690. This also represents an increase in excess of 6% over the week and a spread of $116 over the last 28 days. In contrast, Rotterdam prices were slightly lower, hitting a peak of $666 on Tuesday, up from $622.50 a week earlier.
Concern over spiralling bunker prices will not have been helped by reports in the Financial Times this morning that investors are betting on West Texas Intermediate (WTI) crude oil breaking through $300 later this year. Yesterday WTI was hovering just above $140, up about a percentage point on the day. Brent crude, meanwhile, closed at $142.06, up almost 1.5% over the day and 99.13% more than it cost exactly one year ago. However, if the investors gambles prove well-founded, bunkers still have a very long way to go ... and in only in one direction.
Faced with dramatically higher fuel bills, a growing number of shipping companies are cutting service speeds, some publicly, some less so. The world's largest container line, Maersk, is the latest to announce changes to its schedules. It is revamping its Asian services and will initiate further speed cuts following those introduced towards the end of last year. Other major lines which have announced speed reductions recently include CMA CGM and Japan's NYK. [2/7/08]
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