East of Suez bunker prices have risen with Brent since yesterday, and HSFO380 supply has gotten tighter in Fujairah.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices up in Fujairah ($5/mt) and Zhoushan ($3/mt), and steady in Singapore
- LSMGO prices up in Singapore ($7/mt), and steady in Zhoushan and Fujairah
- HSFO380 prices up in Fujairah ($19/mt), Zhoushan and Singapore ($11/mt)
Fujairah’s HSFO380 price has shot up since yesterday and outpaced gains in Singapore and Zhoushan. The jump has widened Fujairah’s premium over Singapore to $18/mt.
Supply of the high sulphur fuel grade has tightened significantly in the UAE bunkering hub and added upward price pressure.
Recommended lead times for HSFO380 are stretching to eight days in Fujairah, which is the same lead time required in Singapore. VLSFO and LSMGO are more readily available in Fujairah with up to four days required in the port.
Singapore’s VLSFO has maintained its price level in the past day, while Zhoushan and Fujairah have seen moderate gains of $3-5/mt. Zhoushan is currently the cheapest option for VLSFO supply out of the three East of Suez ports.
Brent
Front-month ICE Brent crude has gained $0.43/bbl on the day to 16.00 SGT (08.00 GMT) today, when it stood at $74.97/bbl.
The futures contract has regained some of its losses it made in the previous session. A sell-off yesterday was triggered by concerns over the solvency of China’s second-biggest property developer. If Evergrande defaults on its debt payments it could spill over and dent China’s economy.
“Evergrande’s woes are threatening the outlook for the world’s second largest economy and making some investors question China’s growth outlook and whether it is safe to invest there,” OANDA analyst Ed Moya said.
Support for Brent has come from Shell saying part of its offshore crude production in the Gulf of Mexico will be capped until next year. Hurricane Ida knocked most of Shell’s production capacity in Gulf offline three weeks ago. About 60% of capacity has now been restored, but facilities across its oil fields were heavily damaged.
More and more of the Gulf’s overall crude production capacity returns by the day. 18% of capacity remains shut in, down from a peak of around 95%, according to the latest estimate from the Bureau of Safety and Environmental Enforcement.
The market is looking ahead to the two-day US Federal Reserve (Fed) meeting starting today. Investors will be looking for clues to when the Fed will start tapering its massive asset purchasing programme. Signals of a tighter monetary policy from tapering could strengthen the dollar, and render Brent and other dollar-denominated commodities less attractive to investors.