Thanks for your question Jose. The answer is that a complex range of factors can affect the price of bunkers. The basic price is simply what the refinery charges, (which is clearly related to the price of crude), plus additional amounts around delivery cost and margins for intermediate traders and suppliers before the product reaches the vessel that will burn it as fuel. Local price will vary according to whether delivery is ex-wharf or ex-barge, on tightness or otherwise of supply in various ports.

Other factors that can influence prices locally (in Singapore, for instance) might include speculation around whether a particular large delivery will arrive, and when.

In everyday trading terms, Platts accumulates a number of actual traded prices each day and makes these available as a benchmark for a period after opening in the European morning (or around 4pm in Singapore and China). Nowadays the prices supplied by Bunkerworld, based on a a much wider collection of data and updated throughout the day are being used by the industry as trading benchmarks.

This is very physical market on the ground. The bunker sector does have financial risk management tools around it (see Imarex, for example), but the base price is product ex-refinery + delivery + (small) trader margin. Any other costs, related to risk management for instance, like hedging or credit insurance are additional,and will normally have to be paid out of the trader’s margin.

Jose,

If you just need the price of bunkers, I suggest you use Bunkerworld - we gather a basket of actual prices from some 250 traders/suppliers around the world on a daily basis and publish prices, with historical data shown in graph form. The prices at the four main bunker ports (Singapore, Rotterdam, Houston and Fujairah) are free, if you need to see the other port prices, you would need to subscribe. For risk management costs, I suggest you approach one of the suppliers of these services direct. Imarex is a market leader and specialist - they will be happy to assist I am sure. You can email Mikal Boe at Mikal.Boe@imarex.com. He is managing director of the Singapore office of Imarex (mention I gave you his contact!).

Since the correlation between the price of crude and the pice of bunkers is not exact - the rate of tracking varies according to different circumstances, - you would need a vey sophisticated range of data to project the bunker price - but I suppose that for a rough and ready calculation, averaging the best crude price projections and then adding the average differential between crude and bunkers over a period of time would provide a guide. Good luck.

Glad to help Jose. You can get me on adam@oceanintelligence.com.