The Russian Baltic port of St Petersburg is experiencing the lowest price levels for 380 CST fuel oil, used as bunker fuel for shipping, for five months, tracking lower crude prices.
Last week, 380 CST prices fell $9 last week from $250/mt Tuesday to $241/mt at Friday’s market close — the lowest level since since November 28, 2016, as the dip in crude prices generated uncertainty in the market and weighed on demand.
“The way the market is going it is good to wait a bit,” a buyer said Friday.
The high for 2017 so far was $295/mt January 6, $54/mt higher than Friday’s close.
The slide in ICE Brent futures to below $50/b during the first week of May has led to bearish sentiment in the Northwest Europe and Baltic bunker markets.
Weaker crude has also caused Rotterdam 380 CST fuel oil prices to drop, although the market tends to react quickly to changes.
“St. Petersburg cannot catch up that quickly, so St. Petersburg is not attractive [compared to Rotterdam] on price,” a trader said.
The next two years look set to be difficult for the global shipping industry as it struggles to address problems of excess capacity, shifting trade flows, and global environmental regulations. Shipping companies appear to continually struggle to stay afloat.
Join our Global Head of Platts Ocean Intelligence, Jason Silber, to hear his views on the many challenges facing the shipping industry and address the matter that after a period of consolidation, the bunker industry is keeping a watchful eye on further bankruptcies.
Source: PlattsPrevious Next