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FUEL TESTING a regulaTory perspecTive from new dnvps Boss  !0

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Taking up the helm at the world’s biggest fuel tester DNV Petroleum Services from the middle of this year was Eirik Andreassen. A naval architect by training Andreassen comes to the managing director’s role at DNVPS with extensive experience in the international regulatory aspect of the shipping industry with parent DNV having previously headed-up its international affairs unit. He has spent nearly half of his 20-year career

at DNV involved in the regulatory part of shipping working with organisations such as the International Maritime Organization (IMO), the US Coast Guard and the European Union (EU). Andreassen was also DNV’s council member at IACS including the period of the EU’s “dawn raids” against the international grouping of classification societies. With regulations playing

an ever more pivotal role in the bunkering industry he believes his experience

working with international organisations that govern shipping will stand him in good stead at DNVPS. “I think the understanding of the regulatory aspects as so much of what is taking place as regards to fuel right now is driven by regulation, particularly the statutory conventions,” he explains. He cites the ongoing introduction of

regulations to limit the levels of sulphur burned in bunker fuel. These new regulations produce a host of other issues such as the change in fuel properties caused by blending to bring the sulphur content down to required levels. “I can bring in an understanding as to why this is happening and why the world is concerned about sulphur and the influence of this on the regulatory processes,” he explains. At the same time as bringing regulatory

expertise to the top job at DNVPS Andreassen will continue the focus on the extensive research and development work carried out by DNVPS and engaging with its stakeholders to develop effective fuel management practices for the industry.

A year of price volatility

benchmarked by the 380 cst bunker grade at four key global ports, namely Singapore, Rotterdam, Fujairah and Houston. During the three-month period, prices at the


four ports fluctuated wildly to register price spreads of $50 per metric tonne (pmt) to $70 pmt between the highest and lowest recorded prices, according to Bunkerworld data. In the month of July, the high-viscosity 380 cst

prices displayed a steady one-month climb from an average of $620 pmt towards the $700-pmt mark. On 1 August, prices at all four ports touched their highest mark to date this year with Fujairah breaching $700 pmt while Singapore went up to slightly above $680 pmt. Houston and Rotterdam prices hovered around $670 pmt. Just when bunker buyers braced themselves

to foot higher bills, bunker prices plunged almost immediately by $40 to $70 across the globe. All the gains over July were erased by mid-August as prices settled back down to early July levels. Rotterdam took the biggest fall to $600 pmt from $670 pmt while Singapore prices

he movement of global bunker fuel prices over the past three months is a classic example of a roller-coaster market. Bunker prices worldwide are

plummeted by $50 to $630 pmt. Since mid-August, the market has oscillated

with prices falling and rebounding in the range of $10 pmt until late September. Given the volatility over the past one month, there are no clear indications of the price trend going forward. Looking back, bunker prices hit a

historic high of $752 pmt in July 2008 pre-Lehman crisis. The global recession that ensued sent prices crashing down to $198 pmt in December 2008. Last year, prices largely stayed between $450 pmt to $510 pmt. The price movement of bunker fuel,

a by-product of crude oil, is fundamentally tied to the price of crude oil, especially over the long-term. In the short-term, however, the price movement of bunker fuel and crude oil is not in perfect correlation due to the local market supply-demand factors. As the slowing global economic

growth is capping oil demand, WTI crude oil prices have retreated to slightly below $80 per barrel in late- September from close to $90 per barrel in mid-September.

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DNV Petroleum Services contributes a monthly column on fuel quality and testing issues to Seatrade Asia Week, the only weekly news publication dedicated to covering developments in Asian shipping and maritime. The column appearing every third Friday of the month is written by fuel testing experts from across the globe and takes an indepth look at current issues and trends. If you would like a free trial to Seatrade Asia Week please email

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