East of Suez bunker prices are mostly up today, with fuel availability particularly tight in Fujairah and Singapore.
Changes on the day from Friday, to 16.00 SGT (08.00 GMT) today:
- VLSFO price up in Singapore ($14/mt), Zhoushan ($12/mt) and Fujairah ($11/mt)
- LSMGO prices up in Fujairah ($13/mt), Singapore and Zhoushan ($4/mt)
- HSFO380 prices down in Singapore ($16/mt) and Fujairah ($8/mt)
HSFO380 prices have come down from Friday’s levels, while VLSFO values have seen larger than $10/mt gains. As a result, Hi5 spreads have widened by $30/mt and $19/mt in Singapore and Fujairah, respectively.
Fujairah’s VLSFO price has risen to premiums of $3-6/mt over Singapore and Zhoushan this week, as availability of the fuel grade has tightened in the port recently.
Suppliers are facing cargo shortages due to a lack of blending components, with earliest delivery dates stretching up to the second week of November.
Bunker supply operations have restarted in Zhoushan today, after being disrupted from rough weather last Thursday. Lead times vary between suppliers, but with some able to offer as soon as 27 October.
Brent
Front-month ICE Brent has more than reversed the losses it made at the end of last week by jumping $1.60/bbl higher on the day since Friday, to $86.17/bbl at 16.00 SGT (08.00 GMT) today.
Brent has been trading towards mid-$86/bbl levels today – its highest point since October 2014.
Despite recent calls from the US, India and Japan to increase crude production, Saudi Arabia has doubled down on supply restraint. Saudi energy minister Prince Abdulaziz bin Salman has cautioned against possible future demand setbacks from Covid-19. On Saturday he told Bloomberg Television “We are not yet out of the woods…We need to be careful. The crisis is contained but is not necessarily over.”
“This was interpreted by the market to mean that OPEC+ will stick to cautiously adding supply after drastic cuts were made in 2020,” DailyFX strategist Daniel McCarthy says.
Brent continues to draw seasonal support from increasing heating oil demand as the winter approaches in the northern hemisphere. Demand has been bolstered by Europe and Asia’s energy crunch and more switching to oil-based products than usual.
The number of US oil and gas rigs in operation inched down by 1 to 542 last week, figures from energy services firm Baker Hughes showed on Friday. That was the first weekly drop in seven weeks. The rig count was still nearly twice as high as at the same last time year, however.
Brent values have been rising steadily on the back of recovering global demand and inventory draws since August. Demand has recovered with vaccinations, fewer restrictions on movement and revived economic activity.