According to the weekly outlook of Marine Bunker Exchange (MABUX) for bunker prices, global fuel indices continued their firm decline.
The 380 HSFO index fell to US$486.85/MT, the VLSFO index decreased to US$700.79/MT and the MGO index dropped to US$1042.57/MT.
Global Scrubber Spread (SS) - the price differential between 380 HSFO and VLSFO - did not change significantly over week 48 - minus US$3.47, to US$213.94. The Rotterdam SS Spread, on the contrary, showed a moderate increase for the first time in four weeks - plus US$10 reaching US$190.
In Singapore, the price differential of 380 HSFO/VLSFO also increased by US$9, reaching US$252.
"It is expected that SS Spread does not have any sustainable direction next week," commented a MABUX official.
The European Union and the United Kingdom are expected to raise their combined LNG import capacity by 34%, or by 53,802 billion m³ per day, by 2024 compared with 2021. Floating storage regasification units (FSRUs) are being set up in Germany, the Netherlands, and Finland.
Eemshaven in the Netherlands and Wilhelmshaven and Brunsbüttel in Germany are expected to be operational by the end of this year.
Meantime, natural gas prices in Europe continue a firm uptrend. The price of LNG as bunker fuel at the port of Sines in Portugal rose to US$2,479/MT on 28 November.
Thus, the price of LNG exceeds the cost of the most expensive traditional bunker fuel by US$1,456 on 28 November, the price of MGO LS at the port of Sines was quoted at US$1,023/MT.
Over the week 48, the MDI (comparison of MABUX market bunker prices (MBP Index) vs MABUX digital bunker benchmark (DBP Index)) continued to show an underestimation of 380 HSFO fuel grade in all four selected ports.
The underprice margins did not have a sustainable trend and showed in Rotterdam - minus US$127, Singapore minus US$117, Fujairah minus US$176 and Houston minus US$66.
In the VLSFO segment, according to MDI, Houston returned to the overpricing zone again, joining Singapore, plus US$13 and plus US$46, respectively. In Rotterdam and Houston, VLSFO fuel grade remained undervalued by minus US$50 and minus US$17. Underpricing premium decreased and overpricing increased.
In the MGO LS segment, MDI continued to register fuel underpricing in two out of four ports selected, Rotterdam - minus US$70 and Houston - minus US$82. Singapore and Fujairah remained in the overpricing zone, plus US$23 and plus US$152, respectively. Undercharge ratio, according to MDI, did not have a sustainable direction, while the overcharge narrowed slightly.
"There are many uncertainties surrounding the price cap on Russian oil but further volatility in oil and fuel prices continues, the exact price of the cap – EU governments are still split on the level at which to cap Russian oil prices, how many vessels Russia would need to place its oil to buyers, whether Russia will go through with its promise to stop supplying oil to anyone joining the price cap, etc," commented Sergey Ivanov, director of MABUX.
He also added that all of these factors could change fuel prices from one direction to the other very significantly. The price cap is due to come into effect on 5 December when an EU ban on Russian crude kicks off.
"We expect extreme volatility in Global bunker markets next week with wide range of price fluctuations," noted Ivanov.