East of Suez bunker prices have increased from Friday’s levels, as Brent has gained more than $1/bbl.
Changes on the day from Friday, to 16.00 SGT (08.00 GMT) today:
- VLSFO prices up in Zhoushan ($10/mt), Fujairah ($5/mt) and Singapore ($2/mt)
- LSMGO prices up in Singapore ($9/mt) and Zhoushan ($4/mt), and steady in Fujairah
- HSFO380 prices up in Singapore ($11/mt), and steady in Zhoushan and Fujairah
Zhoushan’s VLSFO price has now flipped to $2-5/mt premiums over Singapore and Fujairah, as the Chinese port recorded sharper gains since Friday.
Bunker suppliers are trying to clear their backlog in Zhoushan. The port remains congested after a local typhoon disrupted bunker operations last Monday. There are more than 10 vessels waiting to receive bunkers in Zhoushan, and the backlog expected to clear by the end of the week.
Singapore’s bunker market continues to be tight with lead times for VLSFO stretching to 11 days. One of the port’s terminals had a Covid-19 outbreak, which delayed barge loading schedules. The Universal Terminal is short staffed, and the number of barges queued up to load products are increasing.
Brent
Front-month ICE Brent has risen by $1.39/bbl on the day from Friday to 16.00 SGT (08.00 GMT) today, when it stood at $85.43/bbl.
Brent has rallied to a seven-year high on tightening global supply. Global oil stockpiles are under pressure from recovering demand as economies around the world continue to ease Covid-19 restrictions. The US has announced it will reopen entry for vaccinated visitors from 8 November, paving the way for a boost in air travel and tourism.
Tight coal and natural gas markets have spiked prices and prompted a bigger-than-expected seasonal shift to oil-based feedstocks for power plants in Asia and Europe. The switch could boost oil demand by as much as 500,000 b/d in the fourth quarter, the Energy Information Administration (EIA) predicts.
“With no signs of the China energy crunch alleviating soon, and with the rest of northern Asia and Europe competing for scarce energy supplies, particularly gas, the price environment for oil remains constructive,” says OANDA market analyst Jeffrey Halley.