Marine fuel brokerage service provider, LQM Petroleum on Tuesday (19 May) warned that despite recent low bunker prices, a significant proportion of marine fuel buyers still do not have any risk management strategies in place to mitigate anticipated price rises.
Two thirds of LQM Petroleum Services clients polled in a webinar on 12 May thought marine fuel prices would rise in the next 12 months.
At the same time, only half the participants said they currently use risk management strategies to mitigate this risk, reported the company.
“This trend reflects the wider industry’s understanding of the tools available to manage bunker price volatility,” said LQM Chief Executive Daniel Rose.
“But we were encouraged by the fact that three quarters of participants on our call stated that they would be interested in locking in today’s low prices.”
LQM Petroleum Services states that it is a hybrid bunker broker and trader which protects itself from energy price changes by entering into fuel oil swap agreements.
“We fully understand the reluctance by some owners and charterers to enter into the fuel oil futures market: it’s an area which leaves some overwhelmed and those with relatively small clip sizes feeling overlooked,” said Rose.
“But we’re in the unique position of being both a broker and experienced trader.
“We can guide potential participants through the entire process and help clients manage their specific hedging needs.”
“The fuel swaps market has independent credible benchmark pricing, robust clearing solutions and good liquidity.
“These are the fundamentals for a successful futures market.”
Opinions as to the duration of the current market volatility were less clear-cut with 21% of the webinar participants thought that current conditions would continue only for the next three months.
32% thought between three and six months whilst 36% felt that six to 12 months a more likely scenario.
The webinar was attended by several shipowners, charterers and traders who responded to the poll.
The top three positive movers in the 2020 bunker supplier list are Hong Lam Fuels Pte Ltd (+13); Chevron Singapore Pte Ltd (+12); and SK Energy International (+8), according to MPA list.
‘We will operate in the Singapore bunkering market from the Tokyo, with support from local staff at Sumitomo Corporation Singapore,’ source tells Manifold Times.
Changes include abolishing advance declaration of bunkers as dangerous cargo, reducing pilotage fees on vessels receiving bunkers, and a ‘whitelist’ system for bunker tankers.
Claim relates to deliveries of MGO to the vessels Pacific Diligence, Pacific Valkyrie, Pacific Defiance, Crest Alpha 1, and Pacific Warlock between March 2020 to April 2020.
3,490 mt of LSFO from Itochu Enex was lifted at Universal Terminal; the same bunker stem was bought by Global Marine Logistics and delivered by bunker tanker Juma to receiving vessel Kirana Nawa.
Representatives of Veritas Petroleum Services, Maersk, INTERTANKO, ElbOil Singapore, and SDE International provide insight from their respective fields of expertise on what lies ahead.