East of Suez bunker prices have jumped with Brent, and LSMGO and HSFO380 availability has tightened in Zhoushan.
Changes on the day to 16.00 SGT (08.00 GMT)
- VLSFO prices up Fujairah ($29/mt), Singapore ($23/mt) and Zhoushan ($22/mt)
- LSMGO prices up in Zhoushan ($24/mt), Fujairah ($22/mt) and Singapore ($21/mt)
- HSFO380 prices up in Fujairah ($21/mt), Singapore ($15/mt) and Zhoushan ($1/mt)
Bunkering has fully resumed with calmer conditions in South Korea, after gale-force winds hit the country’s southern ports on Monday and Tuesday. VLSFO availability remains tight in Ulsan, Busan and Yeosu, where a supplier is expected to replenish stocks with a cargo around 3 December. LSMGO lead times are up to seven days.
In Zhoushan, a supplier has received a VLSFO cargo to replenish its stocks. Lead times of around three days is required for the fuel grade. LSMGO availability is tight in Zhoushan, with cargoes expected on 2 and 4 December, a source says. Fishing boats in China burn domestic LSMGO, and there is a general product shortage due to refinery maintenance. HSFO380 availability is also tight in the port.
VLSFO remains tight amid barge loading congestion in Singapore. Lead times for VLSFO and HSFO380 of around 10 days are advised, and eight days for LSMGO.
VLSFO and LSMGO availability in Fujairah remains tight with lead times of up to eight days. Lead times for HSFO380 have improved to five days.
Brent
Front-month ICE Brent crude has leaped $3.34/bbl higher on the day, to $82.61/bbl at 16.00 SGT (08.00 GMT).
The futures contract is trading at eight-day intraday highs today after a US-led release of emergency oil reserve volumes undershot analyst expectations and possibly trigger a response from OPEC+.
The US will release 50 million bbls from its Strategic Petroleum Reserves (SPR) in an effort to dampen fuel prices and runaway inflation. 32 million bbls of this will by an exchange with four US SPR sites for oil delivered from next month to April 2022, and returned between 2022-2024. 18 million bbls will be pre-approved sales.
India and the UK have gotten behind the US reach-out by committing smaller volumes of 5 million bbls and 1.5 million bbls, respectively. Japan and South Korea are also looking at to release some stocks, with details to be confirmed.
China will release an undisclosed volume on its own terms, not willing to confirm whether it will be part of a joint effort.
A joint release was widely viewed as priced in by traders before the US announcement yesterday.
“The SPR noise over the last few weeks has been successful in seeing the market trade lower… Had it not been for this noise, it’s likely that the market would have continued to trend higher,” ING commodity strategists Warren Patterson says.
All eyes are now back on OPEC+ and whether the group will respond to the SPR release by holding back barrels during its next monthly output policy meeting on 2 December.
“The release of oil reserves is likely to see OPEC adjust its planned increases in output,” ANZ commodity strategist Daniel Hynes says.
Several OPEC+ delegates have told Argus Media and S&P Global Platts the US release is unlikely to change the group’s current course.