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Bunker prices plunge to 10-year lows as oil glut spreads worldwide

BUNKER prices have plummeted to lows not seen in more than a 10 years, dragged down by a global oil glut just when demand for marine fuel declines with the annual slack shipping season and slow-growth in Asian economies.

The daily fuel bill for a Very Large Crude Carrier (VLCC) has fallen from US$75,000 to $18,000, meaning a sharp reduction in operating costs for shippers.

The benchmark end-user price for marine fuels, Singapore's 380-centistoke grade bunker fuel

, closed at US$183.21 per tonne on Tuesday, almost $10 lower from the previous day and at levels last seen in January 2005.

Singapore is the world's main shipping fuel hub, trading over 40 per cent of it globally, noted Reuters.

The fall in bunker fuel follows the tumble in crude prices after the Organisation of Petroleum Exporting Countries ended its meeting without mentioning production targets.

This indicates that members will continue to pump near record levels. OPEC members now seem to be defending market share against one another internally and against competitors like Russia and North America.