Prices in East of Suez ports have moved in mixed directions, and prompt availability for VLSFO and LSMGO remains good in Malaysia’s Port Klang, reports Engine.
VLSFO prices
Changes on the day to 17.00 SGT (09.00 GMT) today:
- VLSFO prices up in Zhoushan ($13/mt) and Singapore ($5/mt), and down in Fujairah ($6/mt)
- LSMGO prices up in Singapore ($15/mt), and down in Fujairah ($18/mt) and Zhoushan ($2/mt)
- HSFO prices up in Zhoushan ($8/mt) and Singapore ($3/mt), and down in Fujairah ($16/mt)
VLSFO prices in Singapore and Zhoushan have increased in the past day, while the grade’s price in Fujairah edged down. Four low-priced VLSFO stems fixed in a tight range of $7/mt in Fujairah have contributed to drag the benchmark lower. The price moves have swung Fujairah’s VLSFO from parity to a marginal discount of $8/mt to Singapore’s VLSFO.
Fujairah’s VLSFO premium over Zhoushan has been erased. Its HSFO price declined by $16/mt in the past day, while the product prices in Singapore and Zhoushan moved up. Fujairah’s HSFO discounts to Singapore and Zhoushan stand at $32/mt and $29/mt, respectively.
Prompt availability of all grades remains tight in Fujairah despite a slight decline in bunker demand. Traders recommend lead times of around 7-10 days. However, some suppliers can offer stems for prompt delivery dates, a source says.
VLSFO and LSMGO availability in East Asia’s Port Klang remains good, with several suppliers projecting lead times of around 3-5 days. Most suppliers can offer smaller stem sizes for even prompter dates, a source says.
In Hong Kong, prompt availability of all grades remains good, with most suppliers advising lead times of 3-5 days – down from around seven days last week.
Brent
The front-month ICE Brent contract gained $1.04/bbl on the day, to trade at $86.89/bbl at 17.00 SGT (09.00 GMT) today:
Upward pressure:
Brent futures broke above $86/bbl today, driven by mounting supply concerns due to escalating geopolitical tensions in both Russia and the Middle East.
Concurrently, improving demand in China, as indicated by recent data on Chinese crude imports and throughput, has also contributed to Brent’s price surge. According to China’s General Administration of Customs (GACC) data, crude imports totalled 88.31 million mt (equivalent to 10.74 million b/d) in January and February. This marks a 3% increase from last year’s figure of 10.4 million b/d during the same period.
Brent oil prices have soared to a four-month high, propelled by bullish macroeconomic data from China and heightened geopolitical tensions resulting from a fresh wave of Ukrainian drone attacks targeting Russian energy infrastructure, SPI Asset Management’s managing partner Stephen Innes highlighted.
Additionally, news of the Iraqi Ministry of Oil planning to slash the country’s total oil exports to 3.3 million b/d starting April has further bolstered Brent’s price gains. It took this decision to reduce exports in the upcoming months to compensate for exceeding its OPEC+ production quotas in January and February.
There is potential for Brent to gain further as “OPEC compliance should be improving” with this announcement Price Futures Group’s senior market analyst Phil Flynn noted.
Downward pressure:
Brent’s price gains were limited by speculation surrounding a potential delay in an interest rate cut by the US Federal Reserve’s Federal Open Market Committee (FOMC), scheduled to convene on Wednesday. The prospect of a higher US interest rate can render dollar-denominated commodities like oil more expensive for non-dollar holders, potentially curbing oil demand growth.
“[Oil] investors are currently focused on the Federal Reserve’s upcoming meeting, hoping that the Fed will navigate through a mixed bag of data and sustain the market rally,” Innes remarked.
Iran recently signed contracts to develop six new oil fields valued at $13 billion, aiming to increase daily production by 350,000 b/d, as reported by its state-owned news agency IRNA. The investments in expanding oil fields could enhance the country’s production in the future.
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Source: Engine
