World News
Oil Price Collapse Could Save Shippers $29 Billion in Bunker Costs
The recent collapse in oil prices could save the shipping industry up to $29 billion in fuel costs over the next year, reports Bloomberg.
The projection was based on its assessment of the industry's total consumption, and for a 12 month period starting from the beginning of the decline in November.
“It’s going to be a benefit for the entire industry,” said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA, who listed Euronav NV and A.P. Moeller-Maersk among the companies who are benefiting the most from lower fuel costs.
Since the Organization of Petroleum Exporting Countries' (OPEC) announcement that the organization would maintain its production ceiling of 30 million barrels of oil per day, prices on the spot market have fallen to five-year lows.
The industry has battled with oversupply as shale gas production in the U.S. ramped up and flooded the market.
It was speculated that OPEC's decision is Saudi Arabia's attempt to cause a crash in the American shale gas industry, having predicted this week that the price of oil could fall even further before stabilizing at around $60.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 644.50 | 2.50 | 765.00 | 14.00 |
| Rotterdam | 607.50 | 0.50 | 764.50 | 24.50 |
| Houston | 632.50 | 4.00 | 807.50 | 5.00 |
| Fujairah | 650.50 | 1.00 | 882.50 | 6.00 |
| Global 20 Ports Average | 665.50 | 6.50 | 870.50 | 14.50 |
| Global 4 Ports Average | 635.50 | 3.50 | 810.00 | 17.50 |
| Global Average Bunker Price | 725.00 | 2.50 | 925.50 | 8.00 |
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