East of Suez bunker prices have risen to their highest point yet this year after Brent passed the $75/bbl mark, and bunkering has resumed in Shanghai.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices up in Singapore ($12/mt), Fujairah ($9/mt) and Zhoushan ($4/mt)
- LSMGO prices up in Fujairah ($5/mt) and Singapore ($4/mt), and down in Zhoushan ($19/mt)
- HSFO380 prices up in Fujairah ($1/mt), and down in Zhoushan and Singapore ($2/mt)
VLSFO prices have reached multi-month highs across Singapore, Fujairah and Zhoushan, as Brent has gained more than $1/bbl on the day.
Bunker operations remain suspended in Zhoushan as Typhoon Chanthu continues to linger in the area. The port’s delivery backlog has been increasing by the day. But bunkering resumed in typhoon-stricken Shanghai today.
HSFO380 has dried up in Zhoushan and Shanghai this week, with only a few suppliers holding enough product available in the two ports. Incoming cargoes of HSFO are expected towards the end of next week which could replenish suppliers’ stocks, according to vessel tracking.
Zhoushan’s HSFO380 shot up on the day on the back of higher Brent prices, coupled with tightness of the fuel grade in the port. Zhoushan’s price has flipped to a $7/mt premium over Singapore.
Brent
Front-month ICE Brent crude has risen by $1.17/bbl in the past day, to $75.47/bbl at 16.00 SGT (08.00 GMT).
The futures contract has hit fresh seven-week highs, coming up with support from diminishing US crude inventories and more optimistic outlooks for oil demand next year.
Hurricane Ida knocked most offshore crude oil production in the Gulf of Mexico offline when it struck over two weeks ago. With less crude coming onshore, US crude oil stockpiles have been drawn down to 417.45 million bbls – a two-year low.
A 6.42 million bbl draw last week was preceded by a 1.53 million bbl draw the previous week, and inventories already came from four straight weeks of draws.
With resupply lines under pressure, ExxonMobil’s 520,000 b/d Baton Rouge refinery has twice had to ask the US Strategic Petroleum Reserves (SPR) to lend it 1.5 million bbls of crude to keep refinery production levels up amid robust fuel demand.
Just under 30% of offshore production in the Gulf remained offline yesterday, the Bureau of Safety and Environmental Enforcement has estimated.
The impact from tropical storm Nicholas has been much less severe after it hit two weeks after Hurricane Ida. Colonial Pipelines quickly restored key oil pipelines it had shut as a precaution ahead of Nicholas. Electricity was quickly back online for the hundreds of thousands of people in the Houston area who lost power immediately after Nicholas hit. Major Texan ports, refineries and terminals in Nicholas path were mostly unscathed by the storm’s winds, heavy rains and water elevation.
The International Energy Agency (IEA) now expects continuous progress on Covid-19 vaccine making and rollouts, and less social distancing, to prop up oil demand by further in the fourth quarter of this year, and next year. It revised its global oil demand forecast for 2022 up by 100,000 b/d to 99.4 million b/d.
IEA’s more optimistic demand outlook followed an upward revision from OPEC earlier this week. OPEC upped its global demand outlook by 870,000 b/d to a pre-pandemic level of 100.8 million b/d.