Bunker prices have mostly gained in East of Suez in the past day, recovering some of the sharp losses made under pressure from tumbling Brent values at the beginning of the week.
Changes on the day to 16.00 SGT (08.00 GMT) today:
VLSFO prices up in Fujairah ($4/mt) and Singapore ($3/mt), and down in Zhoushan ($3/mt)
LSMGO prices up in Zhoushan ($14/mt), Singapore ($11/mt) and Fujairah ($7/mt)
HSFO380 prices up in Fujairah ($23/mt), and steady in Singapore and Zhoushan
Zhoushan is pricing VLSFO more competitively against Fujairah and Singapore after narrowing its premiums by $6-7/mt in the past day, to $3/mt over Singapore and $6/mt over Fujairah.
VLSFO and LSMGO recently ran dry in Port Suez. VLSFO is now back in stock, while LSMGO is still unavailable without any replenishment date given. It could take days or a week before LSMGO becomes available again, sources say.
Fujairah’s HSFO380 price has surged amid tighter availability this week, lifting it above several other East of Suez ports. A supplier carrying the grade recently exited the market, leaving three suppliers offering it in the port. Longer lead times of 14 days are recommended now, up from 10 days a week ago.
Fujairah’s HSFO380 price has shot up by $23/mt in the past day, while Singapore and Zhoushan have seen their prices hold steady. The spike has lifted Fujairah’s price to premiums of $38/mt over Singapore, and $30/mt over Zhoushan.
Fujairah’s price has also risen wider premiums over regional ports, including $10/mt over Egypt’s Port Suez, and $15/mt over Iraq’s Basra.
Brent
Front-month ICE Brent has dropped by $0.45/bbl on the day to 16.00 SGT (08.00 GMT) today, when it stood at $72.66/bbl.
Brent has slid further on the day, but has recovered some from the two-week lows of under $71/bbl it reached yesterday.
Covid-19 concerns continue to weigh on the futures contract. The Delta variant has ripped through the US and spiked infection and hospitalisation rates. China has reintroduced more stringent lockdown measures in several provinces where the virus has resurfaced.
“Stricter mobility constraints may dampen the energy demand for the world’s largest oil-importing country. China accounts for around 26% of the world’s total crude imports, with over 40 million barrels imported monthly so far in 2021,” says DailyFX strategist Margaret Yang.
Meanwhile, US crude, gasoline and distillate inventories were drawn last week, according to American Petroleum figures cited by Reuters. But the draws were smaller than expected and did not provide much upside for Brent.
“API numbers released overnight were not very constructive, with the API reporting that US crude oil inventories fell by 879Mbbls over the last week, which is much less than the roughly 3MMbbls draw the market was expecting,” ING Economics strategists Warren Patterson and Wenyu Yao said today.
Official Energy Information Administration (EIA) data on US crude and oil products will be released at 14.30 GMT today. If these figures show significant weekly draws and point to strong fuel demand, Brent could find some support.