:: Bunkering --- ID :: 13906
Bunkering.com:Why Bunker fuels rise at a higher than crude?
Multiple of the crud oil price

By Srinivas Chowdary Sunkara // petrobazaar / 2nd June, 2017.

The Bunker Index, the daily global average price in U.S dollars per tonne covering all the major fuel grades in more than 300 ports - ended the year almost a third higher than on the corresponding day 13 months earlier, according to bunker index price data.

The BIX was priced at $477.71 per tonne on 30th December compared to $365.08 per tonne on the last trading day of 2015, representing a rise of $112.63, or 30.9 percent. The most significant year-on-year price increases were recorded in the residual fuels category, with both 380 centistoke (cSt) intermediate fuel oil (IFO) and 180 cSt prices rising at a higher than crude. 

What is the relation of crude oil  with bunker fuel?

Bunker fuel is a derivative of crude and  in simple terms, bunker fuel is the gunk that is leftover after refineries have processed all the more valuable fuels from the crude source. It is thick and heavy and must be heated before it can be used in an engine. it is difficult to store and transport and it is ideal for large marine going vessels that have the heavy engines and fuel capacity to handle bunker fuel. Because of this, bunker fuel is not readily available like gasoline / petrol.  Bunker fuel is a prominent component of ocean carriers' actual vessel operating costs.

Is there is any correlation between crude and bunker fuel prices?

There  is no direct correlation between crude oil prices and bunker fuel prices. Bunker fuel price is simply a multiple of the crude oil price, which is called as "Bunker Fuel Multiplier". This Bunker Fuel Multiplier can vary widely from month - to month and year -to- year . Over the past couple of  years, Bunker fuel has been priced at an average multiple of 5.8x and +  above  the price of NYMEX or BRENT. 

topics courtesy:bunkerindex,3plwire