East of Suez Bunker Fuel Market Update
East of Suez bunker prices are sharply down with Brent on the day, erasing yesterday’s gains.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices down in Singapore ($21/mt), Fujairah ($20/mt) and Zhoushan ($19/mt)
- LSMGO prices down in Fujairah ($29/mt), Zhoushan ($24/mt) and Singapore ($14/mt)
- HSFO380 prices down in Singapore ($13/mt), Fujairah ($10/mt) and Zhoushan ($8/m)
Brent’s downward pressure has pulled Singapore’s price down to parity with Zhoushan, and narrowed its premium over Fujairah to $8/mt.
Singapore’s lead times for VLSFO and LSMGO stems are both one day longer, with 7-8 days now required for VLSFO, and 5-6 days for LSMGO.
Zhoushan, on the other hand, remains well supplied with bunkers, with lead times significantly shorter compared to Singapore’s. All three fuel grades can be delivered promptly in the two ports with 2-3 days of notice.
The ports of Fangcheng and Qinzhou in southern China have been out of VLSFO and LSMGO since last week. Replenishment is expected on 14 July when a new cargo is scheduled to arrive.
Brent
The ICE Brent September futures contract has tumbled $2.69/bbl lower on the day, to $75.07/bbl at 16.00 SGT (08.00 GMT)
Brent initially surged to multi-year intraday highs of nearly $78/bbl yesterday, amid supply concerns in the wake of an impasse between Saudi Arabia and the UAE during their monthly output meeting. The two OPEC+ members clashed over whether some of the group’s output cuts should be extended from April 2022 to the end of that year. They also disagreed over the UAE’s request to update its baseline production date from October 2018, from when production quotas were set.
The OPEC+ plan to increase output by 400,000 b/d per month between August and December has been put on ice until a new meeting is called.
Brent later retreated on the prospect that some OPEC+ members will take back unilateral initiative in the absence of a consensus in the group, and pump more barrels.
A stronger US dollar is also weighing on Brent and other dollar-denominated commodities. The dollar has risen to near three-month highs against other currencies ahead of a Federal Reserve meeting which could confirm it intends to increase interest rates in 2023, as it signalled in a meeting last month. That would be an earlier tightening of monetary policy than initially thought.
(ENGINE)