East of Suez Market Update 10 Feb
Prices in East of Suez ports have moved up, and availability of all grades is tight in Zhoushan.
IMAGE: Night scene of Zhoushan, close to the dock on Putuo island. Getty Images
Changes on the day to 17.00 SGT (09.00 GMT) today:
- VLSFO prices up in Zhoushan ($33/mt), Singapore ($7/mt) and Fujairah ($6/mt)
- LSMGO prices up in Zhoushan ($27/mt), Singapore ($11/mt) and Fujairah ($5/mt)
- HSFO prices up in Zhoushan ($12/mt), Singapore ($5/mt) and Fujairah ($1/mt)
- B30-VLSFO prices down in Singapore ($12/mt) and Fujairah ($8/mt)
VLSFO prices in Zhoushan have jumped by $33/mt over the past day, marking the sharpest increase among the three major Asian bunker ports. Zhoushan’s VLSFO is now at premiums of $54/mt and $48/mt over Fujairah and Singapore, respectively.
Zhoushan's HSFO price has also risen, up by $12/mt—the largest increase among the three ports, though well below the VLSFO gain. This divergence has widened the port's Hi5 spread by $21/mt to $66/mt. The spread remains wider than Singapore’s $52/mt and is now close to parity with Fujairah.
On the supply side, VLSFO availability in Zhoushan has tightened despite subdued demand, with several suppliers now quoting lead times of around 7–10 days, compared with roughly five days last week. LSMGO availability has also weakened, with lead times expanding from 3–5 days to 7–10 days. HSFO lead times have similarly increased to 7–10 days, from about seven days previously.
The tighter supply environment is largely the result of loading delays. Multiple suppliers are grappling with loading delays following adverse weather conditions. Weather-related disruption led to temporary anchorage suspensions in Zhoushan last Friday, although operations resumed from Monday morning.
Brent
The front-month ICE Brent contract has gained by $1.99/bbl on the day, to trade at $69.40/bbl at 17.00 SGT (09.00 GMT) today.
Upward pressure:
Brent crude has moved closer to $70/bbl with the Iran risk premium resurfacing in the global oil market.
The US Department of Transportation has issued an advisory for all US-flagged commercial vessels to steer clear of Iranian waters.
This development has brought back fears of a potential US military action in the oil-rich region, according to market analysts.
“This raised concerns that talks between the US and Iran are breaking down and thus lifting the risk of military action, which could disrupt oil supplies in the region,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.
Downward pressure:
The total number of rigs drilling for crude oil in the US rose by one to 412 units last week, according to Baker Hughes.
The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.
In an oversupplied market, any signal of increased future supply can put downward pressure on Brent’s price.
By Tuhin Roy and Aparupa Mazumder
Please get in touch with comments or additional info to news@engine.online
