Downtrend in bunker indices worldwide

In the sixth week of the year, the MABUX global bunker indices continued their firm downtrend. The 380 HSFO index fell to $476.42/MT, the VLSFO index to $700/MT and the MGO index to $988.48/MT.

The weekly average of the Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO – declined to minus $12.68 in Week 06 (vs. $236.33 last week), while the average was also down 3, $84 declined.

In Rotterdam, the average SS spread also declined by $16 (vs. $211 last week). The average weekly price difference of 380 Singapore HSFO/VLSFO (the most significant drop) was minus $23 to $255.

“At the same time, the SS spread weekly averages in Rotterdam and Singapore remained virtually unchanged,” commented a MABUX staffer.

“Nonetheless, European gas prices are well below last year’s records due to mild weather at the start of the winter heating season, continued strong LNG inflows and a recovery in Norwegian pipeline gas flows. Gas storage facilities across Europe were more than 71% full on February 1st. That is well above the five-year average for this time of year,” according to the MABUX report.

The price of LNG as bunker fuel at the port of Sines in Portugal slightly decreased and reached US$1,387/t on February 6th. The price difference between LNG and conventional fuel was US$448 on February 6: MGO LS in Sines port was quoted at US$939/MT that day.

In the sixth week of 2023, the MDI index (comparison of the MABUX MBP index (bunker market prices) with the MABUX DBP index (digital bunker benchmark)) showed an underfuelling with fuel of the fuel grade 380 HSFO in all four selected ports. In other ports, the undercharge level increased slightly and amounted to: in Rotterdam minus $117, Singapore minus $134, Fujairah minus $172 and Houston minus $81.

VLSFO fuel, on the other hand, remained overpriced in all selected ports, according to MDI:
Singapore plus $47, Fujairah plus $30 and Houston plus $34. Rotterdam remains the only port where VLSFO is undervalued: minus $24. Overcharge margins have increased slightly while underpricing has not changed.

In the MGO LS segment, Houston moved back into the overprice zone with Fujairah: up $39 and up $176, respectively. In the other two ports, the MDI index reported an underestimate of MGO LS: in Rotterdam – minus $73 and in Singapore – minus $72.

“The EU embargo on imports of refined petroleum products from Russia came into force on Sunday, February 5. However, Russia had already diverted most of its fuel oil and vacuum gas oil (VGO) exports to Asia and the Middle East before the EU embargo,” noted Sergey Ivanov, director of MABUX.

He added: “Last month the European Union took less than 5% of Russia’s heating oil and VGO, with Greece, Latvia and Italy importing small amounts of these products, and these amounts could easily be diverted to other destinations, mainly in Asia, as well as. For now, we expect global bunker indices to retain the potential for an uptrend over the next week.”

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