East of Suez bunker prices have inched down from Friday’s levels, and bunkering is suspended in Zhoushan and Shanghai after typhoon In-Fa struck China’s eastern coast yesterday.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices down in Zhoushan ($8/mt), Singapore ($6/mt) and Fujairah ($5/mt)
- LSMGO prices down in Zhoushan ($17/mt), Fujairah ($7/mt) and Singapore ($6/mt)
- HSFO380 prices down in Fujairah ($6/mt), Singapore and Zhoushan ($3/mt)
Bunkering has been suspended in Zhoushan since last week, when suppliers in the port braced for the impact of the incoming typhoon In-Fa. The typhoon made landfall in Zhoushan yesterday, and has also suspended bunkering in nearby Shanghai. Port operations in Zhoushan, Ningbo, Shanghai and other ports on the east coast face disruptions until 28 July, sources say.
Zhoushan’s low sulphur prices have risen against other regional ports since Friday. Its VLSFO price premium over Singapore has widened by $2/mt to $5/mt, and its LSMGO premium over Singapore has gone up by $11/mt to $31/mt.
Availability of VLSFO and HSFO380 is tight in Singapore and stems of the grades require up to 10 days of lead time.
HSFO380 continues to be tight in Fujairah, as the number of suppliers offering the high sulphur grade in there has been reduced to three after one supplier exited the market. Only one of these three suppliers can accommodate prompt HSFO380 stems and recommended lead times have gone up to 12 days, which is among the longest in East of Suez ports.
Another typhoon has formed in the Pacific Ocean. Typhoon Nepartak is on track to make landfall in Japan’s northern parts tomorrow and on Wednesday, according to Taiwan’s Central Weather Bureau. Japan’s bunkering ports are mainly concentrated along its southern coast, but Tokyo and other central Japanese ports could face disruptions depending on the trajectory of Nepartak.
Brent
Front-month Brent crude has come down by $0.49/bbl on the day from Friday, to $73.26/bbl at 16.00 SGT (08.00 GMT).
The futures contract has retreated some amid concerns over the spread of the Delta coronavirus variant, and crippling floods in China, but continues to find support in a tighter global supply-demand balance.
The flare-up in Covid-19 cases has extended to a range of countries including China. Several European countries such as Malta and Germany have tightened restrictions for travellers from other countries as protective measures against the more transmissible Delta variant. Vaccination rates are uneven across the continent, leaving some populations more at risk.
Typhoon In-Fa has washed over eastern China yesterday and today, suspending trains and flights. Hundreds of thousands of people have been relocated in Zhoushan, Shanghai and other cities.
Global oil supplies are set to tighten, with economic activity and fuel demand growth expected to outpace the phase-back of OPEC+ oil in the market in the coming months, Barclays and Goldman Sachs said last week.
The supply deficit could spur more US shale producers to drill more. The US rig count reached 387 last week, its highest number since April 2020, Baker Hughes data reported by Reuters showed.