East of Suez bunker prices have come down from multi-month highs under pressure from declining Brent values, and while VLSFO remains tight in Singapore, its price has dipped further below those in regional ports.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices down in Singapore ($21/mt), Fujairah ($12/mt) and Zhoushan ($5/mt)
- LSMGO prices up in Zhoushan ($6/mt), and down in Fujairah ($10/mt) and Singapore ($8/mt)
- HSFO380 prices down in Singapore ($27/mt), Fujairah ($9/mt)
VLSFO remains tight in Singapore. A recent Covid-19 outbreak at Universal Terminal on Jurong island has capped manpower and delayed bunker barges from loading product.
The earliest delivery date is around 10-11 days out for VLSFO in Singapore, compared to 5-7 days for LSMGO. HSFO380 remains particularly tight, with 10-12 days ahead needed and high delivery premiums.
Yesterday, Singapore, Fujairah and Zhoushan’s VLSFO prices surged to their highest point since the IMO 2020 switch to low sulphur fuels in January. The prices have since come down with downward pressure from declining Brent values.
A handful of stems have been fixed in a $10/mt range in Singapore today, with higher end of that range in line with yesterday’s multi-month highs, and the lower end pulling down the benchmark.
Singapore’s VLSFO price drop over the past day has brought it down to discounts of $13/mt to Fujairah, and $22/mt to Zhoushan.
VLSFO is more readily available in Fujairah with lead times of around seven days advised.
Brent
Front-month ICE Brent crude has come off by $0.57/bbl on the day, after rallying to seven-year intraday highs of nearly $86/bbl yesterday. At 16.00 SGT (08.00 GMT) today, the futures contract had come down to $84.86/bbl.
“A fall in US industrial production in September would have not helped sentiment, along with weaker GDP numbers from China,” ING strategists Warren Patterson and Wenyu Yao said today.
Yesterday’s drilling report from the Energy Information Administration (EIA) also weighed on sentiment. US shale oil production is expected the increase by 77,000 b/d from October to 8.22 million b/d in November, with a boost from the Permian region.
Brent ran out of steam temporarily yesterday, before picking up again today amid continuous expectations of tightening global oil supply. In the absence of more OPEC+ crude barrels in the market, and with forecasts of a colder temperatures in northern China, Brent has seen renewed support today.
Heating oil demand is buoyant in China, the world’s biggest energy consumer, amid depleted coal and natural gas stocks and spiralling prices. Power plants across Asia and Europe have increasingly been looking towards fuel oils and diesel as feedstocks ahead of peak seasonal winter demand.