East of Suez bunker prices are mostly up on the day, and Fujairah’s fuel oil stocks have grown amid weaker demand.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices up in Fujairah and Zhoushan ($5/mt) and Singapore ($1/mt)
- LSMGO prices up in Fujairah and Zhoushan ($34/mt), and down in Singapore ($4/mt)
- HSFO380 prices up in Singapore ($12/mt) and Fujairah ($2/mt), and down in Zhoushan ($3/mt)
Zhoushan’s VLSFO price has gained by more than Singapore’s to narrow its discount to $3/mt. The Chinese port has priced the grade at a discount to Singapore since the beginning of September. VLSFO availability improved in Zhoushan this month, when suppliers replenished stocks.
Lead times remain steady for VLSFO stems in Singapore, with 7-8 days recommended, while the fuel grade is more readily available in Zhoushan with 2-3 days ahead. The nearby Chinese port of Shanghai is well supplied with all three fuel grades.
Fujairah’s heavy distillate and residual fuel oil inventories grew by nearly 6% to 8.72 million bbls and recovered from five-month lows, Fujairah Oil Industry Zone and S&P Global Platts data showed today. Weaker bunker demand in the past week and a slowdown in exports were cited as reasons for the stock build.
Bunker fuel oil supply has tightened in South Korean ports, as two of South Korea’s four refiners halted fuel oil imports for September delivery, curbing supply to the country’s ports.
The refiners responded to a period of weaker demand. One of them has later run out of VLSFO to sell in the bunker market.
Lead times of 4-5 days are recommended for VLSFO stems in South Korea’s southern ports, including Ulsan and Busan.
Brent
Front-month ICE Brent has dropped by $0.60/bbl on the day to 16.00 SGT (08.00 GMT) today, when it stood at $71.95/bbl.
A stronger US dollar and signs of weakening oil demand in the US and China put downward pressure on the futures contract yesterday.
“Investors in the US came back from an extended weekend with a more pessimistic market view after digesting last week’s downbeat jobs numbers. The US labor department reported a paltry 235k jobs added for August,” DailyFX analyst Thomas Westwater said.
Brent has regained some of yesterday’s losses today on the back of persistent offline crude oil production capacity in the Gulf of Mexico after Hurricane Ida made landfall on 29 August.
Some production has come back in the Gulf in the past day, bringing the offline share down from 84% to 79%, according to a tally from the Bureau of Safety and Environmental Enforcement. 14% of platforms and 36% of rigs remain unmanned after they were evacuated.
Investors await the US Energy Information Administration’s (EIA) crude and oil products stocks report at 14.30 GMT today to gain a better understanding of how capped production has impacted supplies.