Houston, Panama high sulfur bunker fuel prices slip further, notch four-year low

High sulfur bunker fuel prices in both Houston and Panama edged down Wednesday for the fifth consecutive trading day, notching their lowest levels in over four years as Brent crude futures and fuel oil prices fell.

IFO 380 CST Houston was assessed at $452/mt ex-wharf, down $9/mt from Tuesday and the lowest level since September 29, 2010, when the market was assessed at $439/mt ex-wharf, according to Platts data.

In the absence of indications from market sources, Wednesday’s assessment was based on the decline in Brent. Platts assessed the front-month ICE Brent crude contract at $83.63/b at 3:15 pm EDT (1915 GMT), down $1.37, equivalent to a fall of $8.70/mt.

The high sulfur bunker fuel price in Balboa, Panama, was assessed at $469/mt ex-wharf, a decrease of $13/mt from Tuesday, based on notional offers around $470-$485/mt ex-wharf.

The assessment was the lowest since September 29, 2010, when IFO 380 CST Balboa was at $463/mt ex-wharf, Platts data shows.

Wednesday’s price moves reduced Balboa’s premium over Houston to $17/mt.

So far in 2014, the premium has averaged $18.21/mt, based on Platts data. The premium, however, is still below the $30-40/mt range that bunker suppliers said they need to cover costs.

Market sources anticipated more pressure on bunker prices as a result of aggressive competition for business in Panama and Houston, even if Brent crude prices rebound in the coming days.

“This is like a free-fall roller coaster with no brakes,” a Panama-based source said.

“It seems like it will stop until the next month,” the source said.
Source: Platts