Bunker prices on the way up

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London: Bunker prices are continuing to escalate, much to the consternation of beleagured tanker owners still coming to terms with the recent dramatic decline in their market's rates. In Singapore, IFO 380 CSt hit $349on Thursday, up from an average low point of $236 last December and a rise of 16% over the last 30 days. The story was much the same in Shanghai, with Thursday prices peaking at $372.50 compared with an average $266.50 last December and an increase of almost 14% over the last 30 days. In Rotterdam, Wednesday prices had reached $336.50 compared with an average $193.50 in December and a 12% increase over the last 30 days.
Analysts are predicting that bunkers will continue to firm as oil prices push upwards close to six month highs, although shedding a few cents on Wednesday. Thursday morning saw crude oil hovering around $57 a barrel. But the markets are expecting further increases, perhaps to the mid $60s in the months ahead. Oil prices have been following the upward progress of equity markets recently as analysts watch hopefully for signs of a firm global recovery. However, Open warned on Wednesday that oil demand is still shrinking and the oil price is not based on fundamentals, but more on sentiment.  [15/05/09]