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Will Bathurst, Manager Business Analysis and Intelligence, at Peninsula Petroleum, has given an interview to Platts in the lead up to the Platts Mediterranean Bunker Fuel Conference in Barcelona, November 25-26. Bathurst will be a speaker at the event.
Q: The new ECA sulphur limit has been in place for a while now. Was the impact on the European bunkering industry as big as expected?
A: I think in the middle of last year the market was indeed worrying about the new sulphur limit but then oil prices slid from August and January 1 brought a market where Rotterdam MGO prices were beneath the October 2015 levels of 380 CST. On top of that, there wasn’t even the feared increase in MGO premiums and the shipping market managed to absorb the change far better than some expected. That said, January brought a bunker market still primarily focused on the continued fallout from the loss of OW.
Q: This conference is taking place just over a year on from the OW bankruptcy, what has changed?
A: The impact of that sad event on our industry has been immense. At Peninsula we have seen a surge in direct demand from new and existing end-users in our supply locations as many bunker procurers have sought to have one fewer step in their purchasing process. That has placed greater demand on suppliers for direct/increased credit lines and had we not had a collapse in the oil price, the bunker market could have faced serious credit related challenges as OW’s entire market share was thrown back out in the market almost overnight. This is before we even consider the ongoing legal complications and continuing vessel arrests around the world.
Q: Has the fall in oil prices been positive for bunker suppliers, or has it increased competition to the extent that it has hit profit margins?
A: There is no way that I would even attempt to speak for other suppliers in the industry however changes in the oil price in whatever direction are beyond our control as a market so any successful bunker supplier has to be prepared for price volatility and be able to manage it accordingly. It is something we as a market have had to deal with for a long time. As a result, the main area of concern is what it means for our customers. For the oil markets, we have a supply glut but that has meant that the demand from areas of the tanker sector has been very beneficial to both our market in terms of bunker demand volumes and tanker owners themselves on a financial level. The sector has seen a demand boost for VLCCs and Suezmaxes that no one was really expecting a year ago which has been a good thing. Of course on the flip-side, many other customers such those in the offshore sector have suffered enormously from the oil price fall.
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