East of Suez bunker prices are up from Friday’s levels, tracking higher Brent crude values.
Changes on the day to 16.00 SGT (08.00 GMT) today:
- VLSFO prices up in Zhoushan ($9/mt), Fujairah ($6/mt) and Singapore ($4/mt)
- LSMGO prices up in Zhoushan ($10/mt), and steady in Fujairah and Singapore
- HSFO380 prices up in Zhoushan ($19/mt), Fujairah ($17/mt) and Singapore ($16/mt)
Singapore’s HSFO380 has seen relatively larger gains on the day, compared to VLSFO’s gains in the bunkering hub. As a result, Singapore’s Hi5 spread has dropped to multi-month lows of $86/mt.
Both VLSFO and HSFO380 require 7-9 days of lead time in Singapore, while LSMGO continues to be more readily available with 4-5 days ahead needed.
Zhoushan’s HSFO380 and VLSFO stocks have been mostly replenished now. Lead times for VLSFO have come back down to 2-3 days for most suppliers in Zhoushan now, while one supplier advises around four days of lead time. LSMGO remains in good supply in the Chinese port.
Brent
Front-month ICE Brent crude has climbed $0.87/bbl higher since Friday, to $72.98/bbl at 16.00 SGT (08.00 GMT) today.
Shut in oil production in the US Gulf pushed the futures contract to four-week intraday highs of more than $73/bbl yesterday. Hurricane Ida has shut in around 95% of capacity in the Gulf of Mexico, according to the Bureau of Safety and Environmental Enforcement. All 11 US oil rigs were evacuated and 288, or about half of the platforms, were evacuated as producers braced for the impact of the hurricane. This makes up around 12% of total US capacity, the US government agency said.
Refineries, utilities and ports in Louisiana are struggling with blackouts and flooding after Ida made landfall. The region’s oil output is not expected to recover for several days, ING strategist Warren Patterson said today.
“Infrastructure needs to be assessed for damage, while those refiners who lost power will need to wait for it to be restored. If this is the case, it suggests that we could see further upside in refined product cracks,” Patterson said.
Traders will look for more price direction from the monthly OPEC+ meeting scheduled for tomorrow. The group is expected to stick to its plan to bring back 400,000 b/d of oil per month, according to a Reuters report citing three sources.
While the global supply-demand balance remains in a deficit, “OPEC+ has built in enough of a cushion that this market is still nowhere near having supply concerns,” OANDA analyst according to Ed Moya.