Brent oil was down $1.38, or 2.1%, at $63.19 a barrel by 0511 GMT. U.S. crude fell 1.48 cents, or 2.4%, to $59.49 a barrel.
New over the weekend was seemingly dominated by the ongoing situation in the Suez Canal, that is disrupting Trade flows through Egypt, between Europe and Asia. Overnight on Sunday, the ship has been almost completely floated and will be inspected before it is moved, but the distribution is due to persist as a result of the build-up of vessels over the past six days.
Disruptions continue in the Suez Canal after efforts to dislodge the grounded tanker still are without success, with the 400-meter-long vessel named Ever Given is causing havoc on global markets, which include disrupting fuel supplies to nations such as Syria, and scrambling supply chains for fashions houses and manufacturers of perishables. The US are currently assessing the situation, with the US navy potentially aiding the rescue efforts pending approval from the Canal’s Authorities. The longer the ship remains lodged, the more frantic the situation will become, with tanker rates already climbing substantially since the news broke and more alarmingly, estimates from the German insurer Allianz have predicted the cost to global trade will be at around $6 billion to $10 billion per week.
Analysts expect a greater price impact on smaller tankers carrying oil products, such as naphtha and fuel oil, for export from Europe to Asia, if the canal remains shut for weeks. The blockage is weighing on the already weak Asian gasoil, or diesel, market. More than 60% of Asian exports to the west flowed via the choked Canal in 2020, according to FGE. (Reuters)
S&P Global Platts estimate that the backlog of ships waiting to cross the Suez is now around 320, with there being 28 crude tankers at least, with up to 26 million barrels of crude onboard, with some of these ships already diverting around the Cape of Good Hope- adding precious time and costs to voyages. (S&P Global Platts)
Ships waiting to use the canal have been diverted to nearby Bitter Lakes area, away from the proximity of the canal entrances. Short-term demand for VLSFO may increase and therefore support prices in the near-term. (Ship and Bunker)
In the fuel market, demand for high sulfur fuel oil from South Asia continues to rise, as power generation and industrial demand increases, with India and Pakistan each securing a spot cargo via tender for the first half of April, according to traders. It is also expected that Singapore will be able to meet the demand for fuel oil in the short-term, with 3.5 million MT of product in land storage, as well as up to 3 million MT in floating storage. (S&P Global Platts)
INDEX: (MTD Estimates)
* Sing 380: 382.27
* Rott 3.5%: 367.34
* Sing 0.5%: 491.30
* Rott 0.5%: 471.76
**Rotterdam 3.5% INDIC**
Apr21 348.00 / 350.00
May21 346.75 / 348.75
Jun21 343.50 / 345.50
Jul21 339.75 / 341.75
Aug21 334.75 / 336.75
Sep21 329.25 / 331.25
Q2-21 346.25 / 348.25
Q3-21 334.75 / 336.75
Q4-21 318.25 / 320.25
Q1-22 309.75 / 312.75
CAL22 301.25 / 307.25
**Singapore 380 INDIC**
Apr21 362.00 / 364.00
May21 360.00 / 362.00
Jun21 357.25 / 359.25
Jul21 354.00 / 356.00
Aug21 350.25 / 352.25
Sep21 346.25 / 348.25
Q2-21 359.75 / 361.75
Q3-21 350.00 / 352.00
Q4-21 338.00 / 340.00
Q1-22 331.00 / 334.00
CAL22 322.25 / 328.25
**Rott VLSFO 0.5% INDIC**
Apr21 442.75 / 447.75
May21 442.25 / 447.25
Jun21 441.75 / 446.75
Jul21 441.25 / 446.25
Aug21 440.50 / 445.50
Sep21 439.75 / 444.75
Q2-21 442.25 / 447.25
Q3-21 440.50 / 445.50
Q4-21 437.25 / 443.25
Q1-22 433.25 / 441.25
CAL22 428.75 / 436.75
**Sing VLSFO 0.5% INDIC**
Apr21 463.50 / 468.50
May21 462.50 / 467.50
Jun21 461.75 / 466.75
Jul21 461.00 / 466.00
Aug21 460.25 / 465.25
Sep21 459.50 / 464.50
Q2-21 462.50 / 467.50
Q3-21 460.25 / 465.25
Q4-21 457.25 / 463.25
Q1-22 453.25 / 461.25
CAL22 448.75 / 456.75
**Sing 10ppm GO INDIC**
Apr21 66.94 / 67.08
May21 67.08 / 67.28
Jun21 67.21 / 67.41
Jul21 67.29 / 67.49
Aug21 67.32 / 67.52
Sep21 67.35 / 67.55
Q2-21 67.00 / 67.30
Q3-21 67.27 / 67.57
Q4-21 67.10 / 67.40
Q1-22 66.88 / 67.18
CAL22 66.74 / 67.14
**ICE Gasoil 10ppm INDIC**
Apr21 502.43 / 506.43
May21 504.38 / 508.38
Jun21 505.88 / 509.88
Jul21 506.97 / 510.97
Aug21 507.93 / 511.93
Sep21 509.05 / 513.05
Q2-21 504.25 / 508.25
Q3-21 507.98 / 511.98
Q4-21 508.66 / 512.66
Q1-22 509.17 / 513.17
CAL22 510.87 / 514.87
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