Bunker prices have mostly made sharp gains in East of Suez bunkering hubs, and bunkering has been suspended ahead of an approaching typhoon in Zhoushan and Shanghai.
Changes on the day from Friday, to 16.00 SGT (08.00 GMT) today:
- VLSFO prices up in Zhoushan ($10/mt) and Singapore ($9/mt), and down in Fujairah ($11/mt)
- LSMGO prices up in Fujairah ($37/mt), Zhoushan ($20/mt) and Singapore ($9/mt)
- HSFO prices up in Fujairah ($20/mt) and Singapore ($5/mt), and steady in Zhoushan
Bunkering has been suspended in Zhoushan and Shanghai since yesterday, ahead of Typhoon Chanthu’s expected landfall on China’s east coast today. Port operators and bunker suppliers have been bracing for Chanthu’s impact by suspending bunker deliveries and also some cargo handling over the weekend.
Bunkering is not expected to resume in Zhoushan and Shanghai until Wednesday and there could be big backlog, sources say.
The typhoon’s trajectory is then set to change for a pivot towards South Korea and Japan, Taiwan’s Central Weather Burau forecasts.
Fujairah’s VLSFO price has dropped in the past day. Several lower-priced stems of the grade have pulled its price down relative to other regional ports, and widened its discounts to Singapore and Zhoushan to $25-26/mt.
The UAE bunkering fulcrum also has the Middle East’s lowest levels for VLSFO, only matched by Iraq’s Basra. For ships sailing through the Mediterranean, Malta has the grade around $8/mt lower than Fujairah, and Gibraltar around $12/mt lower.
Brent
Front-month ICE Brent has gained $0.99/bbl on the day since Friday, to $73.42/bbl at 16.00 SGT (08.00 GMT) today.
Brent has climbed to fresh six-week intraday highs as nearly half of crude oil production in the Gulf of Mexico remains shut in, while most Louisiana refineries have normalised operations or at least restarted.
The production halt has contributed to draw commercial US crude oil inventories down to their lowest point since September 2019, data from the Energy Information Administration (EIA) showed last week. Gasoline and distillate inventories were also heavily down last week, after a week of reduced refinery production.
ExxonMobil’s 520,000 b/d Baton Rouge refinery and Marathon’s 565,000 b/d Garyville refinery – Louisiana’s two biggest – were knocked offline by Hurricane Ida two weeks ago, but have now resumed to normal operations, Argus Media reports. Four refineries in Alliance, Norco, St. Charles and Meraux have yet to restart.
With crude production lagging crude demand in the Gulf, ExxonMobil made a second 1.5 million bbl loan from the US’ Strategic Petroleum Reserves (SPR) last week to keep up production levels amid robust oil products demand.
China is also tapping into its strategic oil reserves, but not as much for a lack of product as to stave off inflationary price pressure for oil sold to its manufacturing industry. Oil from the reserves will be auctioned to domestic refiners.
Investors await new oil demand outlooks from OPEC today, and from the International Energy Agency (IEA) tomorrow. Two OPEC+ sources cited by Reuters said OPEC will likely revise down its demand forecast for 2022, which is more optimistic about demand growth than forecasts by the IEA and EIA.