East of Suez bunker prices are rising for another day as Brent is on track for a weekly gain.
Changes on the day to 16.00 SGT (08.00 GMT) today:
VLSFO prices up in Singapore ($6/mt), Fujairah ($5/mt) and Zhoushan ($2/mt)
LSMGO prices up in Singapore ($3/mt), Zhoushan and Fujairah ($2/mt)
HSFO380 prices up in Fujairah ($3/mt), Singapore and Zhoushan ($2/mt)
Singapore’s Hi5 spread has widened by $4/mt on the day to stand at $128/mt, as its VLSFO has seen larger gains than its HSFO380.
The bunkering hub’s VLSFO continues to stand at a premium over Zhoushan, which has widened to $3/mt today. Suppliers in Zhoushan are currently working through their backlogs after a typhoon had suspended bunkering until earlier this week. Bunker operations have restarted at Zhoushan’s inner anchorage and part of its outer anchorage.
Lead times are steady in Fujairah for another week with low sulphur fuel stems requiring up to six days ahead. HSFO380 is still tight in the UAE port with up to 11 days needed, which is one day longer from Singapore’s recommended lead time for the high sulphur fuel grade.
Brent
Front-month ICE Brent has dipped from highs of more than $76/bbl yesterday, but has added $0.46/bbl on the day to 16.00 SGT (08.00 GMT), when it stood at $75.71/bbl.
The futures contract is heading for a 2% increase on the week. It has been pushed higher by US oil inventory data showing crude stocks at their lowest since January 2020, and robust road fuels demand pulling gasoline out of storage.
US mobility and economic activity has not been dented to the same extent as during previous Covid-19 waves as people’s behaviour is unlikely to change now that there is higher vaccination coverage and fewer restrictions on movement, the Federal Reserve said in a meeting yesterday.
High inflation has eroded some purchasing power in the US and weighed on the US dollar, which makes commodities priced in dollars such as Brent more attractive to investors.
“A large part of yesterday’s rally was part of a broader move, with the USD coming under quite a bit of pressure,” ING strategists Warren Patterson and Wenyu Yao said today.
“Although in early morning trading this morning, the market is giving back some of these gains, with the USD trading higher.”
The demand outlook remains uncertain as the Delta coronavirus variant rips through parts of Asia, Europe, Australia and the US. Japan has extended state of emergency measures to more areas and for a longer period of four weeks, up from three weeks previously, Argus Media reports. The country’s new daily infections hit a record of more than 10,000 yesterday, prompting extended bans on alcohol and travel curbs.