The Marine Bunker Exchange (MABUX) global indices showed a decreasing tendency during Week 41. The 380 HSFO index fell by US$10.57, the VLSFO index dropped by US$7.75, while the most significant price decline was seen in the MGO index, which fell by US$34.89.
“At the time of writing, a slight upward trend prevailed in the market amid the escalation of Arab-Israeli conflict,” pointed out a MABUX official.
The Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO – increased slightly by US$2.82, while the global weekly average climbed by US$2.06 as well.
In Rotterdam, the SS Spread increased by US$14, while the weekly average increased by US$34. In Singapore, however, the price differential between 380 HSFO and VLSFO fell by US$2, while the weekly average rose by US$15.
“We expect that due to high volatility in the fuel market, SS Spread may continue to grow moderately in the coming week,” noted a MABUX spokesperson.
According to a statement, Europe’s underground natural gas storage capacity is rapidly rising, nearing 97% of total capacity. In August, the anticipated storage capacity of 90% for the forthcoming heating season had already been met.
“If the current storage rates continue, it is possible that it may break the all-time record for underground gas storage occupancy by mid-October,” stated a MABUX official.
Meanwhile, LNG imports into Europe have fallen to their lowest level since February 2022, with terminals running at only 41% of their full capacity. Furthermore, on October 10, the European gas price climbed by more than 10%, topping US$52 per MWh. The Balticconnector gas pipeline between Finland and Estonia was temporarily closed due to a leak that caused this spike. Furthermore, the market may be impacted by the worsening situation in the Middle East.
The price of LNG as bunker fuel in the port of Sines (Portugal) showed a rise and reached US$861/MT on 9 October. At the same time, the difference in price between LNG and traditional fuel on 9 October dropped sharply: US$112 in favour of LNG versus US$262 a week earlier: MGO LS was quoted that day in the port of Sines at US$973/MT.
The MDI index (the ratio of market bunker prices (MABUX MBP Index) to the digital bunker benchmark MABUX (MABUX DBP Index)) continued to show underpricing for all types of bunker fuels at all chosen ports during Week 41.
The average weekly underpricing in the 380 HSFO category climbed by 16 points in Rotterdam, 12 points in Singapore, 15 points in Fujairah, and 12 points in Houston. The level of fuel underpricing in Fujairah exceeded the US$100 mark.
According to MDI, the average undervaluation in the VLSFO category grew by only 2 points in Houston. MDI narrowed by 20 points in Rotterdam, 13 points in Singapore, and 19 points in Fujairah in the other three ports.
In Singapore, MDI values approached the 100% correlation mark between market prices and the digital benchmark.
Furthermore, in the MGO LS category, the average underpricing premium dropped in Rotterdam by 8 points and in Fujairah by 23 points, but increased in Singapore by 4 points and in Houston by 7 points. In Singapore and Fujairah, fuel underpricing exceeded US$100.
“We expect that next week the global bunker market will be dominated by an upward trend due to the escalating conflict in the Middle East,” commented Sergey Ivanov, director of MABUX.
