East of Suez fuel prices are down on the day in response to fall in Brent crude, and Japan has low supply of bunker fuels.
Changes on the day to 16.00 SGT (08.00 GMT) today:
VLSFO prices down in Zhoushan ($18/mt), Fujairah ($15/mt) and Singapore ($9/mt)
LSMGO prices down in Fujairah ($16/mt), Singapore and Zhoushan ($9/mt)
HSFO380 prices down in Singapore ($8/mt) and Fujairah ($7/mt)
HSFO380 supply in Japan has been hit by refinery maintenance work, according to a source. The earliest delivery date is pegged at 27 November. VLSFO and HSFO380 are only available in Japan’s Tokyo Bay. HSFO280 supply is in demand among power companies to support heating as temperatures dip. However, domestic VLSFO and LSMGO products are available in small quantities.
VLSFO availability remains tight in Singapore. Lead times of 9-11 days are advised owing to spike in demand and loading delays. Prompt supply of the grade is expected to remain tight in Fujairah, where around seven days of lead time should be considered. In Zhoushan, VLSFO availability remains normal with around 2-3 days of lead time needed.
LSMGO lead times in Singapore extend to 7-9 days, with some suppliers providing it on earlier dates. That is similar to Fujairah, while Zhoushan is tight with a resupply cargo expected in December at the earliest, a source said.
HSFO380 availability has improved in Zhoushan as two more suppliers have replenished their reserves. Around four days of lead time is required – significantly shorter than the 9-10 days ahead recommended in Singapore and Fujairah.
Hi5 spreads are down by $8/mt to $145/mt in Fujairah, and by $1/mt to $161/mt in Singapore.
Brent
Front-month ICE Brent has come down by $0.66/bbl on the day, to $82.08/bbl at 16.00 SGT (08.00 GMT).
Brent has lacked direction while the market ponders whether US President Biden will release crude from the country’s Strategic Petroleum Reserves (SPR) to rein in the recent price rally, according to ING commodity strategists Warren Patterson and Wenyu Yao.
“The hesitation appears to be because the market outlook is more comfortable in 2022, while an SPR release would also only offer short-term relief to the market,” they added.
But if emergency US crude is released, it might not make much of an impact on domestic US fuel prices.
“It seems the energy market is convinced that even if the US resorts to tapping the strategic petroleum reserve, the benefits would be minimal and yield little benefit to the US consumer,” says OANDA analyst Ed Moya.