Argus Media publishes whitepaper for greater insights on its bunker price assessments

Argus Media on Wednesday (21 September) released a white paper titled VLSFO hedging tools disconnect to provide transparency and better understanding of its bunker price assessments. 

Argus said marine fuel suppliers and shipowners often use very-low sulphur fuel oil (VLSFO) wholesale (barge and cargo) prices and crude (Brent and Dubai) prices to hedge their VLSFO for bunkering sales and purchases. 

“The significance of VLSFO wholesale and crude as hedging tools fell this year. Argus’ outright VLSFO bunker assessments are informed by a robust number of daily deals and are the best tool to use in contact indexations,” according to Argus. 

“This year’s oil price volatility created a price disconnect, exposing marine fuel buyers and sellers to basis risk. Singapore and Fujairah are the world’s biggest bunker markets, with plenty of liquidity for buyers and sellers to use outright VLSFO bunker prices,” it added. 

Argus said as a price reporting agency, it collects numerous VLSFO spot bunker deals in Singapore and Fujairah to ensure robust price assessments.

The whitepaper offer insights into:

•     Argus bunker price assessments are based on actual reported deals
•     Delivered bunker prices increasingly disconnect from cargo prices
•     Oil price volatility exposes buyers and sellers to basis risk
•     Subscribers can now download non-confidential daily bunker deals for key ports

Note: Full copy of the whitepaper titled ‘VLSFO hedging tools disconnect’ can be found here. 

Photo credit: Argus Media
Published: 22 September, 2022