Bunker prices are on the rise today across East of Suez ports, and Hi5 spreads have widened as VLSFOs have recorded the sharpest gains.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices up in Singapore ($15/mt), Zhoushan ($12/mt) and Fujairah ($10/mt)
- LSMGO prices up in Zhoushan and Singapore ($4/mt), and steady in Fujairah
- HSFO380 prices up in Singapore ($9/mt) and Fujairah ($1/mt)
Singapore’s Hi5 spread has widened by $6/mt on the day to stand at $126/mt – the port’s highest levels since 21 June. Similarly, Fujairah’s price difference between HSFO380 and VLSFO has grown by a further $9/mt today, reaching $127/mt.
VLSFOs saw the sharpest daily increases compared to the rest of the fuel grades. VLSFO is now more expensive in Zhoushan, followed by Singapore and Fujairah.
Zhoushan and Shanghai continue to see good fuel availability and short lead times, while Singapore’s low sulphur bunker market has tightened some this week.
Brent
Front-month ICE Brent has come up by $0.81/bbl on the day to 16.00 SGT (08.00 GMT) today, when it stood at $75.68/bbl.
Concerns over tightening global oil supplies have given Brent a fresh boost and lifted the key oil benchmark by 2% over its settlement level on Friday.
Crude values have been volatile during the OPEC+ impasse, after its monthly negotiations failed two weeks ago and again last week. The group voted to ease 2 million b/d of its remaining 5.8 million b/d output cuts in 400,000 b/d increments between August and December. Member states also favoured extending their output management pact from April next year to the end of that year.
But the UAE put down its foot, demanding its production quota should be updated from the October 2018 baseline before it could get behind the new policy. The UAE has recently invested heavily in production capacity and would likely see its quote adjusted upward with an updated baseline.
“Oil prices reacted sharply to the OPEC+ impasse last week, eyeing the prospect of a deepening supply deficit if a deal cannot be reached. At the same time, the possibility of a market share battle, even if remote, is hanging over markets, as is the potential for high fuel prices to stoke inflation and damage a fragile economic recovery,” the International Energy Agency (IEA) said in its monthly outlook published today.
Price gains have been capped by worries over a global resurgence in Covid-19 cases. Several Asian countries, including Japan, South Korea and Vietnam have reintroduced lockdown measures, and the Tokyo Olympic Games will go ahead without spectators.
“The robust crude demand outlook is starting to take a hit as many countries continue to struggle with the more infectious Delta variant,” OANDA market analyst Ed Moya said.
The flare-up in Covid-cases has been uneven around the world, and globally there were 422,000 new confirmed cases recorded yesterday, according to Johns Hopkins University data. That is still less than half of the all-time 906,000 peak on 28 April.