Very low-sulphur fuel oil (VLSFO) monthly averages at four US ports have declined to their lowest levels since 2021, driven by uncertainty surrounding US tariffs.
Houston and New Orleans VLSFO monthly averages dropped to $470/t and $491/t, respectively, so far in April. That is the lowest average for Houston since April 2021 and the lowest since February 2021 for New Orleans.
New York and Philadelphia VLSFO averages are at $498/t and $510/t, respectively, the lowest since April 2021 for New York and May 2021 for Philadelphia.
Bunker market participants have had mixed reactions to the price decline so far. According to one trader, some buyers have been trying to buy bunker fuel with delivery dates for one month from now, to lock in the lower prices, rather than one week out, which is typical when buying bunker fuel in the spot market.
Another market contact said they have seen a mixture of elevated buying interest but also some buyers who will hold off waiting to see if prices continue to drop or if the volatility in prices ease as there have been large price swings within the same business day.
"I have not seen anything this volatile since the start of the Russia vs Ukraine war," the trader said.
Oil futures went up by almost 5pc on 9 April reversing losses from early that morning after US president Donald Trump paused higher punitive tariffs against key trading partners such as the EU and Japan and increased tariffs against China.
The wild swing for intraday bunker prices on 9 April, which typically traces Brent crude, lowered market demand.
