Prices in East of Suez ports have moved in both directions, and prompt availability of VLSFO and LSMGO is good across several Chinese ports, reports Engine.
Changes on the day to 17.00 SGT (09.00 GMT) today:
- VLSFO prices are down in Zhoushan ($20/mt), Singapore ($6/mt), and Fujairah ($1/mt)
- LSMGO prices are up in Fujairah ($5/mt), and down in Zhoushan ($13/mt) and Singapore ($6/mt)
- HSFO prices up in Singapore ($2/mt) and Fujairah ($1/mt), and down in Zhoushan ($6/mt)
Availability
VLSFO prices in Zhoushan have declined by $20/mt in the past day, while the grade’s prices in Singapore and Fujairah have remained broadly steady. The Chinese bunker hub’s VLSFO price is at a discount of $19/mt to Fujairah’s VLSFO and $22/mt to Singapore’s VLSFO.
Prompt availability of all bunker grades remains good in Zhoushan, with traders recommending short lead times of 2-5 days, unchanged from last week. Overall, bunker demand remains sluggish in Zhoushan, a source says.
VLSFO and LSMGO availability has improved in the North Chinese Dalian port, while Tianjin continues to face tightness across all grades.
In South China, prompt availability of VLSFO and LSMGO has improved in the port of Shanghai, but HSFO remains subject to enquiry. The availability of both low-sulphur fuel grades remains tight in Guangzhou.
Prompt VLSFO and LSMGO availability remains good in the other Chinese ports of Fuzhou, Yangpu and Xiamen. In Hong Kong, all bunker grades remain good, with most suppliers projecting lead times of 3-5 days, down from about seven days last week.
Brent
The front-month ICE Brent contract shed $0.09/bbl on the day, to trade at $86.80/bbl at 17.00 SGT (09.00 GMT).
Upward pressure:
Brent futures gained this week, supported by heightening supply concerns in the global oil market.
Ukrainian drone strikes on Russian energy facilities, along with OPEC members’ decision to extend output cuts until the end of June, bolstered Brent’s price.
Iraq’s commitment to reducing oil exports after OPEC+ non-compliance, further tightened the oil supply outlook, SPI Asset Management’s managing partner Stephen Innes commented. The country has pledged to reduce its total oil exports to 3.3 million b/d from April.
Oil market is anticipating additional cutbacks from OPEC, Hynes said.
Brent futures gained more support from the American Petroleum Institute’s (API) weekly oil stocks report, which showed a decline in US crude inventories, indicating demand growth from the world’s largest oil consumer.
The API reported a 1.5-million-barrel decrease in US commercial crude inventories for the week ending 15 March.
Downward pressure:
Due to recent drone attacks launched by Ukraine, Russia’s refining capacity has declined, leading to a surge in crude oil exports from Russia, Reuters reported.
Oil exports from Russia’s western ports are expected to increase by approximately 260,000 b/d in March over its initial monthly plan, reaching 2.22 million b/d. Analysts suggest this could exert downward pressure on Brent’s price.
Additionally, the US Federal Reserve (Fed) is anticipated to postpone interest rate cuts this year, in response to recent strong US inflation figures, Innes said. The Fed members are scheduled to meet later today.
Higher interest rates strengthen the US dollar, potentially decreasing demand for dollar-denominated commodities like oil.
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Source: Engine
