Surging oil demand sees VLSFO prices surpass $600 for first time since the start of the pandemic
The price for very low sulphur fuel oil (VLSFO) has crossed the $600 per ton mark for the first time since just after the global sulphur cap came into existence at the start of last year.
Oil prices are beginning the week on another hefty rise, following eight weeks of gains. Brent increased by 0.97% in early trading to $85.68 a barrel on the December ICE contract. WTI was up by 1.36% to $83.40 in the November Nymex market, the highest figure seen since 2014.
In Rotterdam, the price of VLSFO is now $606 per ton and in Singapore it stands at $ 622 per ton. February 2020 was last time VLSFO prices were in the $600 per ton territory.
Analysts at Norwegian shipbrokers Lorentzen & Stemoco noted today that as VLSFO prices march ahead, prices for high sulphur fuel oil are starting to lag, reopening the spread in the fuel types. In Fujairah, for example, the delta is over $100 per ton.
“That will comfort shipowners with scrubber installations able to save some $6,000 a day on VLCCs laden with crude consuming about 60 tons per day,” the analysts suggested in a note to clients today.
Latest data from Clarksons shows that in gross tonnage terms 23.9% of the global merchant fleet including the orderbook are fitted with scrubbers.
