Shipping Express News-Fuel prices soar to highest point since early 2020

　The spread between the VLSFO and HSFO prices widened to more than $200 per tonne in February.

　　As crude oil prices approach $100 per barrel bunker fuel costs are getting higher and bunker prices are at their highest level since early 2020. Bunker fuel is likely to remain high even if oil prices fall. Recent months have seen ICE Brent and NYMEX WTI at $94.10 per barrel and $92.83 per barrel, respectively, meaning crude oil prices are at their highest levels since 2014.

　　A ton of very low sulfur fuel oil was sold yesterday for $735 in Singapore, the world's largest bunkering hub.

　　According to Argus Marine Fuels, VLSFO accounted for nearly 80 percent of total fuel sales in Singapore last year. High-sulfur fuel oil accounted for 21.6 percent of sales and marine diesel 9.5 percent.

　　The price of a ton of VLSFO in the ports of Amsterdam, Rotterdam and Antwerp was $687, while in Houston Gibraltar, Algeciras and Ceuta the price of a ton was $683 and $726.

　　Stefka Wechsler, head of marine fuels at Argus, said prices vary from port to port but this does not usually affect vessel routing.

　　The VLSFO-HSFO premium in Singapore widened to more than $200 per ton in February, according to Argus Marine Fuels. This compares with an average monthly spread of $125 per tonne last year.

　　The differential price trend between VLSFO and HSFO has benefited scrubber tower vessels, especially very large crude carriers, which are earning almost twice as much as their non-towered counterparts.

　　"One thing shipowners can consider now is to install scrubber towers on their vessels which will allow them to burn HSFO cheaper than VLSFO."

　　LNG carriers are helping to increase demand for VLSFOs and MGO as they change their fuel mix and increasingly choose conventional fuels over expensive natural gas.

　　Integr 8 Fuels says LNG has lost its price competitiveness to MGO and to a greater extent VLSFO.

　　The recent BRS weekly report is pessimistic about crude oil but says bunker prices are likely to continue to rise even as crude oil prices weaken. This is because VLSFO and MGO have been and will likely be supported by tight global crude markets.

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