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Week 6: Crude Tanker Industry Update

PART:
1 2 3 4
Part 3
Week 6: Crude Tanker Industry Update PART 3 OF 4

Week 6: Where Are Oil Prices and Bunker Fuel Prices Heading?

Looking ahead

Previously in this series, we discussed that most of the crude tanker stocks gave negative returns in week 6—week ending February 9, 2018. VLCC (very large crude carrier), Suezmax, and Aframax rates rose last week. In this part of the series, we’ll see how crude oil and bunker fuel prices fared in week 6.

Week 6: Where Are Oil Prices and Bunker Fuel Prices Heading?

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Oil prices

In week 6, oil prices posted the steepest weekly decline since January 2016. Last week, the oil price collapse was due to the market sell-off and a stronger US dollar. A buildup in US crude oil stockpiles and a greater-than-expected US oil production growth figure were behind the fall in oil prices.

Brent crude oil prices (DBO) closed at $62.7 per barrel on February 9, 2018—down 8% from the previous week. WTI (West Texas Intermediate) oil prices were down 9% week-over-week—well below $60 per barrel.

Bunker fuel prices

On February 8, 2018, the average bunker fuel price was $416 per ton—compared to $444 per ton on February 1. According to Gibson’s report for week 6, bunker fuel prices at Rotterdam were $351 per ton on February 8—compared to $378 per ton the previous week. Bunker fuel prices at the Port of Fujairah dropped to $381 per ton from $397 per ton the previous week, according to the report.

Which companies were impacted?

Industries that transport commodities on ships incur bunker fuel costs. The industries include LNG (liquefied natural gas) carriers, product tankers, dry bulk carriers, and crude oil tankers. Bunker fuel prices closely relate to oil prices.

Some of the major crude oil tanker companies are Nordic American Tankers (NAT), Frontline (FRO), Gener8 Maritime Partners (GNRT), and Euronav (EURN). GasLog (GLOG) and Hoegh LNG Partners (HMLP) are LNG carrier companies. Navios Maritime Partners (NMM) is a major dry bulk shipper.

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