East of Suez bunker prices have extended their gains today as Brent climbs to new three-year highs.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices up in Zhoushan ($8/mt), Fujairah ($7/mt) and Singapore ($3/mt)
- LSMGO prices up in Singapore ($12/mt), Zhoushan ($7/mt) and Fujairah ($6/mt)
- HSFO380 prices up in Zhoushan and Singapore ($9/mt), and down in Fujairah ($4/mt)
Singapore’s VLSFO-LSMGO spread continues to widen, adding another $9/mt on the day to stand at $111/mt today.
HSFO380 now requires up to 10 days of lead time in the bunkering hub, compared to a shorter eight days for VLSFO in the port. LSMGO is more readily available in Singapore at four days.
Bunker operations have mostly resumed in Fujairah after Cyclone Shaheen suspended bunkering from 2-4 October, but barge loadings and delivery delays have mounted.
The earliest delivery dates for VLSFO have been pushed back to 12-13 October for the majority of suppliers. LSMGO is particularly tight in the UAE bunkering hub as only 2-3 of the 10-11 suppliers that normally offer the grade can supply.
At the same time, HSFO380 continues to be tight in Fujairah, with lead times stretching up to 12 days, which is about two days more than in Singapore and among the three East of Suez ports.
VLSFO prices have moved to parity between Fujairah and Singapore today. Their discounts to Zhoushan have widened to more than $20/mt.
Brent
Front-month ICE Brent has extended its five-day rally by gaining $0.84/bbl on the day, to $82.56/bbl at 16.00 SGT (08.00 GMT).
Brent traded above $83/bbl earlier today, rallying to fresh three-year highs despite indications of another weekly crude and products stock build and cooling demand in the US.
A weekly report from the American Petroleum Institute (API) showed a near 1 million-bbl build in US crude oil stocks in the week to 1 October. Gasoline and distillate stocks also gained weight over the week, in a sign of less robust demand.
Official US inventory data is due for release from the Energy Information Administration (EIA) today at 14.30 GMT. Stock builds there could confirm a demand dip and possibly weigh on prices.
OPEC+ supply restraint continues to prop up Brent. The group decided this week to maintain its 400,000 b/d monthly output increases for November, despite calls from the US and India to pump more to keep a lid on prices.
“The group is clearly concerned about the potential hit to demand in the coming months if Covid wreaks havoc once more and restrictions are reimposed and therefore opted to maintain planned increases of 400,000 barrels per day, each month for now,” OANDA market analyst Craig Erlam commented.