With crude oil prices steadily climbing in price after the April shocks the bunker fuel prices have, as expected, followed suit and have edged northwards again this week.
Bunker prices have continued to moderate upwards globally during the week. MABUX Global Bunker Index for 380 HSFO rose from US$254/tonne on 28 May up to US$274/tonne (plus US$20) on 4 June. Meanwhile, VLSFO edged higher from US$295/tonne to US$314/tonne (plus US$19) and MGO LS increased from US$371/tonne to US$385/tonne (plus $14).
In some bad news for bunker suppliers there are a number of forecasts saying that global bunker fuel demand is expected to fall by 5%-10% year-on-year in 2020 as the coronavirus pandemic slows trade and impedes shipping and ship crew movements in many countries.
In the meantime, initial fears about the escalation of bunker fuel quality issues due to the widespread adoption of very low sulphur fuel oil (VLSFO) and blended fuels have been mostly exaggerated.
Good news last week was that there was sharp decline registered in non-compliant very low sulphur fuel oil (VLSFO) samples globally. Around 8% of VLSFO samples tested by VPS (Veritas Petroleum Services) at the end of 2019 had sulphur content over 0.50%, but by March-April 2020 that index had fallen to 1.1%. It means that disputes over the sulphur content of new IMO 2020-compliant fuel blends are likely to be declining.