East of Suez bunker prices have dropped further from Friday’s levels, as Brent crude values have come under pressure.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices down in Zhoushan ($11/mt), Singapore ($8/mt) and Fujairah ($5/mt)
- LSMGO prices down in Zhoushan ($15/mt), Fujairah and Singapore ($8/mt)
- HSFO380 prices down in Singapore ($8/mt), Zhoushan ($7/mt) and Singapore ($8/mt)
Zhoushan’s VLSFO has now dropped to a $3/mt discount to Singapore, after the fuel grade saw a steeper price fall on the day in the Chinese port. The fuel grade was equally priced in the two ports throughout most of last week.
Singapore’s Hi5 spread maintained its Friday levels of $128/mt, as both HSFO380 and VLSFO recorded similar drops. VLSFO stems require up to nine days of lead time in the bunkering hub, compared to 10 days ahead for HSFO380.
Lead times are shorter for VLSFO in Fujairah and Zhoushan, at three and two days respectively.
Brent
Front-month ICE Brent has come down by $0.78/bbl on the day since Friday, to $72.63/bbl at 16.00 SGT (08.00 GMT).
Brent has fallen to six-week lows as OPEC+ has reached a deal to break the deadlock. OPEC+ will pump 400,000 b/d more oil in each month from August to December, for a total easing of 2 million b/d of cuts made last year.
The group curbed output by a historic 10 million b/d last year to prop up slumping oil prices. It has since eased cuts in gradual increments while global oil demand has recovered. The supply cut deal was initially set to expire in April next year, but has now been extended to December with a three-month pause option to allow for output cuts in the event that supply-demand dynamics change.
Output negotiations stranded earlier this month when the UAE set a baseline production update as a condition for backing a deal. After weeks of sideline negotiations to salvage the group’s pact, the UAE got a concession to adjust its baseline from May 2022, along with Saudi Arabia, Russia, Kuwait and Iraq.