The cost of bunker fuel for ships could hit an all-time high this year, according to a forecast by McQuilling Services Marine Transportation Advisors, based in Garden City, N.Y.
McQuilling is forecasting the average cost of IFO 380 fuel oil worldwide will be $690 per metric ton this year compared to $672 per ton in 2012. The actual price in 2012 was higher than McQuilling’s forecast last year, which was $650 per ton.
McQuilling said its prediction about the cost of bunker fuel is based on a forecast it develops for Brent crude oil. (For example, the $690 price for bunker fuel this year correlates to a Brent price of $108.) But it noted the gap between the cost of Brent and bunker fuel is widening because of tighter specifications for bunker fuel and refineries adjusting the output so that they produce less residual fuel and more distillate fuel. At the same time, shipowners are being required to burn even more expensive low-sulfur fuel in so-called "emission control areas" (ECAs) such as the one created along the coasts of North America last year.
Beyond this year, McQuilling forecasts the average annual price of bunker fuel could gradually rise to $760 per ton.
McQuilling said that could make slow steaming even more attractive, and further tighten the market because more ships are required to move the same amount of cargo when they move slower. Higher fuel costs may also encourage more scrapping of older tonnage and orders of more efficient “eco” ships. - Chris Dupin