East of Suez Market Update 13 Apr

Most prices in East of Suez ports have moved up, and bunkering remains halted in Zhoushan’s OPL area for nearly a week.

IMAGE: Aerial view Zhoushan City, Zhejiang Province. Getty Images

Changes on the day from Friday to 17.00 SGT (09.00 GMT) today:

• VLSFO prices up in Fujairah ($53/mt), Singapore ($29/mt), and down in Zhoushan ($5/mt)
• LSMGO prices up in Singapore ($109/mt), Fujairah ($100/mt) and Zhoushan ($82/mt)
• HSFO prices up in Fujairah ($37/mt), Zhoushan ($21/mt) and Singapore ($16/mt)
• B30-VLSFO prices down in Singapore ($4/mt)

Zhoushan’s VLSFO price has fallen by $5/mt over the weekend, while prices in Fujairah and Singapore have risen. As a result, Zhoushan’s VLSFO has shifted from a $49/mt premium over Fujairah to a $9/mt discount, while its premium over Singapore has narrowed by $34/mt to $17/mt.

Bunker operations at Zhoushan’s Tiaozhoumen and Xiazhimen outer anchorages have been suspended for nearly a week due to rough weather, a source said. Meanwhile, operations continue smoothly at the more sheltered Xiushandong anchorage and the inner anchorage at Mazhi.

The disruption has led to a backlog of 50–60 vessels awaiting fuel, a trader said. Suppliers are currently recommending lead times of 5–7 days for all grades as they work through the congestion, compared with last week’s lead times of 7–10 days for VLSFO and 5–10 days for both LSMGO and HSFO.

There is still no clear indication of when operations at the affected anchorages will resume.

In Taiwan, supply has been slightly affected by Middle East tensions, although prices have responded more sharply. Volatility in Brent crude, driven by regional tensions, has significantly impacted bunker markets, a Taiwan-based trader said.

Recommended lead times remain around two days for VLSFO and LSMGO in Keelung, Taichung and Hualien, while Kaohsiung requires around three days.

Brent

The front-month ICE Brent contract has gained by $4.84/bbl on the day from Friday, to trade at $102.76/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has rallied as hopes of a Pakistan-mediated ceasefire deal between the US and Iran lost steam over the weekend, following 21 hours of failed peace negotiations in Islamabad.

The US Central Command (CENTCOM) will enforce a blockade on vessels entering and exiting Iranian ports today, it said earlier.

“Expectations of an end to this conflict were dashed after weekend talks ended without agreement,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Meanwhile President Donald Trump has signalled Washington’s plan to resume some military operations in Iran.

These measures will “restrict Iran’s ability to export oil and will exacerbate the supply disruptions the market is experiencing,” Hynes added.

Downward pressure:

Brent’s price has felt some downward pressure following firm US inflation data, as it dampens expectations of further interest rate cuts by the US Federal Reserve (Fed) this year.

The US inflation rate, based on the Consumer Price Index for all urban consumers (CPI-U), increased by 0.9% in March, higher than the 0.3% growth noted in February, according to the US Bureau of Labor Statistics (BLS).

On an annual basis, the US CPI advanced 3.3% last month – much higher than the 2.4% growth seen in February.

Higher interest rates in the US can weigh on demand growth and make dollar-denominated commodities like oil more expensive for holders of other currencies.

By Tuhin Roy and Aparupa Mazumder

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