East of Suez bunker prices have made sharp losses, pulled down by Brent values weakening on the prospect of an imminent OPEC+ deal and signs of lower US fuel demand.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices down in Zhoushan ($19/mt), Singapore ($18/mt) and Fujairah ($14/mt)
- LSMGO prices down in Fujairah ($19/mt), Singapore ($16/mt) and Zhoushan ($15/mt)
- HSFO380 prices down in Fujairah ($23/mt), Zhoushan and Singapore ($16/mt)
VLSFO prices have fallen by similar amounts in Singapore and Zhoushan to keep the two ports’ prices at parity with one another.
The recommended lead time for VLSFO stems in Singapore has been extended by two days to 8-9 days now. HSFO380 and LSMGO lead times are steady, at 10 days and 4-5 days respectively.
Singapore’s Hi5 spread narrowed by $2/mt today dropping back to $126/mt.
At the same time, Fujairah’s Hi5 spread widened further today by $9/mt to $130/mt, as the port’s HSFO380 price saw a sharper drop on the day compared to VLSFO.
Brent
Front-month ICE Brent is down by $2.62/bbl on the day, to $73.67/bbl at 16.00 SGT (08.00 GMT).
The futures contract fell amid news of a compromise between Saudi Arabia and the UAE that could develop into a deal for OPEC+ to supply more crude. The parties have made progress in negotiations, but a deal is not there quite yet, the UAE’s energy minister said in a statement yesterday.
“It seems OPEC+ will shortly have a plan to raise output and that is welcomed news, as surging demand had oil market getting too tight,” OANDA market analyst Ed Moya said in a note.
Saudi Arabia and the UAE have locked horns for two weeks over the UAE’s claim to have its baseline production quota updated from October 2018 now that it has greater production capacity.
The market reacted to news of a breakthrough by selling off to de-risk their positions in expectation of an imminent deal that could see OPEC+ pump another 2 million b/d of oil between August and December, and extend their supply restraint management pact from April 2022 to the end of 2022.
Builds in US gasoline and distillate stocks pointed to a slowdown in transport and industrial fuel demand. The builds weighed on oil prices even as US commercial crude oil stocks were heavily drawn again and brought down to their lowest level since January 2020.