Bunker prices have risen across East of Suez ports, tracking higher Brent values.
Changes on the day to 16.00 SGT (08.00 GMT) today:
• VLSFO prices up in Fujairah ($13/mt), Singapore ($11/mt) and Zhoushan ($3/mt)
• LSMGO prices up in Singapore ($11/mt), Zhoushan ($9/mt) and Fujairah ($8/mt)
• HSFO380 prices up in Fujairah ($7/mt), Zhoushan and Singapore ($4/mt)
VLSFO prices have seen similar sharp gains in Fujairah and Singapore in the past day, rising to near parity with one another. Zhoushan’s VLSFO has recorded a smaller daily increase, flipping it to $3/mt discounts to Fujairah and Singapore.
Singapore’s fuel oil rose to five-week high on the week adding another 4% to stand at 21.55 million bbls, Enterprise Singapore showed this week.
VLSFO supply has become more difficult for prompt dates in Singapore as there is less available product in the market. Lead times have gone up from eight days to 10-11 days for the low sulphur fuel grade.
Lead times are standing at six days in Fujairah, while the port remains congested after tropical storm Shaheen suspended deliveries at the beginning of last week.
Bunker operations have restarted in Hong Kong after it was hit by Typhoon Kompasu earlier this week. Bunker suppliers are trying to clear their backlogs after some of them momentarily stopped offering on Wednesday due to adverse weather conditions.
Brent
Front-month ICE Brent crude has risen by $0.80/bbl on the day, to $84.84/bbl at 16.00 SGT (08.00 GMT).
The futures contract hit $85/bbl today for the first time in three years. Tightening global oil supplies, accelerated by power plants switching from coal and natural gas, has propped up Brent.
The US Energy Information Administration (EIA) estimates that the energy crunch could pull 500,000 b/d of oil-based fuels such as fuel oil and diesel to power plants. The oil market will be in a deficit of 700,000 b/d until January, before monthly incremental OPEC+ supply increases will close some of that gap, the EIA said.
OPEC+ members have reiterated that they will stick to their plan of increasing output by 400,000 b/d per month to April next year, defying calls to cool prices by pumping more.
Brent has seen some headwind from a surprise build in US crude inventories this week. The country’s stockpiles added 6.09 million bbls in the week to 8 October, when they reached at a seven-week high of 426.98 million bbls.
Technical indicators indicate that Brent is in overbought territory and could retreat by as much as $5-8/bbl, according to OANDA market analyst Jeffrey Halley.
“Any sell-off will be as short in duration as the fall, should it occur. Looking at the price action today though, it seems that oil could remain in heavily overbought territory for a few sessions yet,” he says.