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There are 2 main index prices to calculate bunkers. One is called Crude oil and other other one is Brent oil. But what is the difference?
Actually the product itself is the same. Crude oil. To be precise, it is a light, sweet blend that can be refined easily into petrol and associated products.
The difference relates to where these indexes are calculated. Crude Oil WTI in the US, and Brent Oil is the rest of the world. (Europe, Middle East, Africa.. etc)
Crude Oil WTI (West Texas Intermediate) is exchanged at NYMEX (New York Mercantile Exchange) – and shows the average price of the crude forward contract. It is mainly relates tocontracts from the US production, which is around 1/3 of the global quantity.
Brent Oil is europe based, brent futures are traded at ICE (International exchange) which accounts for 2/3 of the world’s trading. Production from OPEC (Organization of the Petroleum Exporting Countries) , and Europe and Africa are included in this index price.
Crude oil, in theory, should be more costly to reflect the greater cost of logistics and the higher quality. However due to the shele boom, the price of WTI has gone down and currently trades under Brent price.
How is my bunker calculated?
These indexes are for the price of cargo, (crude oil) so when we talk about bunkers, you will also have to add the logistic cost. Both factors are based on global indexes.
Locally there are many other smaller indexes which the supplier uses to calculate their bunker price. These are published by Platts.
For example, in Singapore, they have the MOPS (Mean of Platts Singapore) which is a pricing basis for many refined products in southeast Asia. The price + delivery cost (as of Dec 2020 this premium is around 15$ depending on the supplier)
Predicted MOPS VLSFO 0.5 price: $381.95 Todays expected Singapore VLSFO price: $390-$395 pmtd
In the south of France, they use CIF MED (Cost, Insurance and Freight Meditteranean) , in Rotterdam it is Barges.
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