Global energy and commodity price reporting agency Argus Media on Wednesday has launched the whitepaper ‘Making sense of a ‘new normal’ and mapping new course in the global bunker fuel market’.
The paper discusses the events in Q1 of 2020 that have shaken up market forces in the bunker fuels market, drastically altering many aspects of its landscape for the foreseeable future.
International marine fuel markets have been subject to three waves of turbulence this year, notes the paper.
First,the International Maritime Organization (IMO) capped marine fuel sulphur emissions content at 0.5%, down from 3.5% on 1 January.
In February, petroleum demand started to slide on the back of shutdowns in response to the Covid-19 pandemic.
In March, the Saudi Arabia-Russia oil price war caused crude prices to drop. Despite a mid-April Opec+ agreement to reduce crude oil production, crude prices crashed as the coronavirus pandemic response intensified, prompting an oil glut and oil tank storage to fill up.
As a result, the paper observed prices of the three main types of marine fuels — very low-sulphur fuel oil (VLSFO) with 0.5% sulphur, high-sulphur fuel oil (HSFO) with 3.5% sulphur, and 0.1% sulphur marine gasoil (MGO) — traced crude down from January to April.
But VLSFO losses outpaced HSFO losses and the VLSFO over HSFO premium narrowed.
According to traders, US Gulf VLSFO stocks grew from mid-March to mid-April with a fair amount of low-sulphur vacuum gasoil (LS VGO) making its way into the US Gulf VLSFO blending pool, notes the paper.
It adds that demand for 0.5% sulphur VGO as a fluid catalytic cracker (FCC) feedstock for the production of gasoline and diesel was down on coronavirus-related supply shocks.
As a result, the Argus-assessed US Gulf VLSFO–LS VGO premium held at over $5/bl during the one month period, with the premium spiking to as high as $8-9/bl.
A full copy of the paper is available for download here.
Photo credit and source: Argus Media
Published: 29 May, 2020
Caroline Yang, President of SSA, addresses issues earlier raised by players; including PMC No. 04, the seven-day restriction, contactless bunkering, sampling point, hose connection, and more.
IBIA Asia, ABIS, sources from Singapore’s bunkering and surveying companies, and an industry veteran share with Manifold Times the issues expected from MPA’s latest Covid-19 measures.
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.