East of Suez bunker price movements have been mixed amid a $0.50/bbl Brent gain in the past day.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices up in Zhoushan ($10/mt) and Fujairah ($3/mt), and down in Singapore ($3/mt)
- LSMGO prices up in Zhoushan ($10/mt), Fujairah ($5/mt) and Singapore ($4/mt)
- HSFO380 prices up in Singapore and Zhoushan ($3/mt), and down in Fujairah ($3/mt)
Singapore’s VLSFO price has seen a small drop on the day, while Zhoushan’s price recorded the sharpest gain among the three ports. As a result, Singapore’s $12/mt premium over Zhoushan has now flipped to a $1/mt discount.
Bunker supply operations have also resumed at the east Xiushan anchorage, which is one of Zhoushan’s outer anchorages. Bunkering has gradually returned across Zhoushan and Shanghai as the ports recover from the impact of typhoon In-Fa. Suppliers continue to work through backlogs in the Chinese port, and with lead times varying between them.
Zhoushan’s recommended lead times of around five days is still shorter than in Singapore, where 7-8 days are advised.
VLSFO stems require 7-8 days in Singapore, while the fuel grade can be procured at a shorter five days in spite of the recent bunker supply disruptions cause by typhoon In-Fa in eastern China.
Brent
Front-month ICE Brent has extended on its gains by adding $0.54/bbl on the day, to $75.25/bbl at 16.00 SGT (08.00 GMT).
The futures contract has received support from declining US crude inventories, which were down by 4.09 milllion bbls on the week, to their lowest level since January 2020, according to Energy Information Administration (EIA) data. A stock draw for gasoline also strengthened the argument for robust US fuel demand, even in the face of the rapid spread of the Delta coronavirus variant.
The US Federal Reserve wrapped up a two-day meeting yesterday with the Fed’s chair Jay Powell saying “progress” has been made towards its inflation and employment targets. The Fed is expected to start tapering its $120 billion per month asset purchasing programme when sufficient strides have been seen in the country’s economic recovery and stability. Powell said it is not quite there yet, and will keep a close eye on inflation and employment start tapering at the right time.
The recent US spike in Covid-19 cases has clouded the economic outlook, but the Fed views this with less concern than previous waves as people are not expected to change their behaviour to the same extent.
“The Fed policy statement was somewhat hawkish now that the economy has made progress towards the Fed’s goals and as policymakers seem somewhat unfazed by delta variant risks,” OANDA analyst Ed Moya commented.