Will bunker prices go into negative territory?
14th May 2020 10:27 GMT


Recently we saw the US WTI crude contract for May drop into negative territory. These remarkable prices were driven by low storage availability and flurry of sellers looking to close their positions ahead of expiry. At present, with the rise in crude oil prices due to OPEC+ production cuts and the easing of lockdowns in some areas, it seems prices could now see more upside.

But with the COVID-19 pandemic, Hin Leon’s collapse, oil price volatility, and the new credit crunch, the bunker and shipping industries are facing tough times.

Will bunker prices follow crude into negative territory?

Some traders and suppliers in Asia and Eurasia have told Platts Bunkerworld it's unlikely that prices would go into negative territory, as they involved logistic and delivery costs. So maybe it’s too early for bunker buyers to expect free oil. However,  if storage is full in a port and all options are exhausted, there is a chance that prices could be severely discounted. 

Like many, the Singapore bunker market most aligned with Brent crude and, as such, unlikely to follow negative prices but it these uncertain times we have all learned to never say never.

We would welcome your vote in our latest poll.

Will bunker prices follow crude into negative territory?

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Abhishek Anupam - Platts
14th May 2020
Recently we saw the US WTI crude contract for May drop into negative territory. These remarkable prices were driven by low storage availability and flurry of sellers looking to close their positions ahead of expiry.

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