Global bunker prices have surged with Brent as the futures contract bounced back by nearly $2/bbl to make it above $70/bbl again.
Changes on the day to 08.00 GMT today:
- VLSFO prices up in Singapore ($26/mt), Gibraltar ($25/mt), Fujairah ($22/mt), Rotterdam ($12/mt) and Houston ($1/mt)
- LSMGO prices up in Fujairah ($38/mt), Gibraltar ($23/mt), Rotterdam ($12/mt), Singapore ($10/mt) and Houston ($4/mt)
- HSFO380 prices up in Singapore, Rotterdam ($8/mt) and Fujairah ($7/mt), and down in Houston ($10/mt) and Gibraltar ($5/mt)
Singapore’s VLSFO price has shot up on the back of Brent and several higher-priced stems in the past day, doubling its price premium over Fujairah to $8/mt, and extending its premium over Zhoushan to $17/mt.
HSFO380 remains tight in Fujairah and priced $20-30/mt above Iraq’s Basra and Egypt’s Port Suez. Longer lead times of around 12 days have been advised for HSFO380 stems in Fujairah since last week, and its price also surged to wider premiums over Singapore and Zhoushan.
Gibraltar’s VLSFO price has flipped back to a premium of $8/mt over Rotterdam, after dipping below Rotterdam’s price yesterday.
Thick fog reduced visibility in Gibraltar this morning. But there is minimal bunker congestion with three vessels waiting either for bunker barges to become ready or for a lack of space in the port. A supplier is 2-4 hours delayed in Gibraltar and Algeciras, while another is running about half a day after schedule in Algeciras, port agent MH Bland says. Suppliers are also delayed by 8-10 hours in Ceuta.
HSFO380 prices have come off by equal amounts in Houston, Balboa and Cristobal, keeping the Panamanian ports at $12-14/mt discounts. Tighter availability pushed Houston’s price to rare premiums two weeks ago. Supply is less tight now, but Houston has held at premiums.
Brent
Front-month ICE Brent has come up by $1.93/bbl in the past day, to $70.26/bbl at 08.00 GMT.
Brent has recovered from some of the losses it made in the previous session, when it slumped to three-weeks lows amid heightened concerns over Chinese lockdown measures and fuel demand destruction.
Investors were looking for bargains buys when Brent fell below $68/bbl yesterday, helping the futures price back up. Further gains could be capped by the overhanging threat of prolonged and more extensive restrictions on movement in China. A spike in cases of the Covid-19 Delta variant across China has prompted the government to cancel flights, isolate major cities and roll out mass testing.
New daily cases rose to 235,000 in the US yesterday, according to government data. Hospitalisation rates have soared in US states with low vaccination cover, but authorities have so far been adamant that the country is not heading back into more widespread lockdowns.
On the supply side, OPEC+ will be monitoring the unfolding Covid-19 situations in China and the US ahead of the group’s next monthly output policy meeting on 1 September.
“While it is unlikely that the recent market weakness will see OPEC+ react, further weakness could see the group become increasingly concerned,” ING strategist Warren Patterson and Wenyu Yao said today.
“…if we get to this meeting and there has been further price weakness, there is the real possibility that we see the group go back on their easing plan. It is for this reason that we believe that any downside in oil prices is fairly limited.”