East of Suez Market Update 14 Jan

Most prices in East of Suez ports have moved up, and bad weather could disrupt bunker deliveries at the UAE ports of Fujairah and Khor Fakkan between 16-17 January.

IMAGE: Container ships and gantry cranes in Port Khor Fakkan, UAE. Sharjah Ports

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

• VLSFO prices up in Fujairah ($16/mt), Singapore ($2/mt), and down in Zhoushan ($2/mt)
• LSMGO prices up in Fujairah ($29/mt), Singapore ($5/mt), and down in Zhoushan ($4/mt)
• HSFO prices up in Singapore, Fujairah ($6/mt) and Zhoushan ($5/mt)
• B30-VLSFO prices up in Singapore ($3/mt), and down in Fujairah ($4/mt)

Fujairah’s VLSFO price has climbed by $16/mt over the past day, while prices in Singapore and Zhoushan have remained broadly steady. The price movement has turned Fujairah’s marginal discount to Singapore into a premium of $6/mt and narrowed its VLSFO discount to Zhoushan by $18/mt, bringing it to $10/mt.

Fujairah’s LSMGO price has surged by $29/mt, in contrast to largely unchanged levels in Singapore and Zhoushan. Consequently, Fujairah now holds substantial LSMGO premiums of $142/mt over Singapore and $111/mt over Zhoushan.

Prompt bunker availability in Fujairah continues to be tight across all grades, with several suppliers running under constrained delivery schedules. Most suppliers are quoting lead times of 5–7 days, although a few are still able to arrange urgent stems at a premium, according to a source. Similar supply conditions are being reported in Khor Fakkan.

Adverse weather is forecast in both Fujairah and Khor Fakkan between 16–17 January, which is expected to disrupt bunker deliveries.

Brent

The front-month ICE Brent contract has gained by $0.26/bbl on the day, to trade at $64.87/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Rising unrest in Iran has continued to support Brent crude’s price this week.

In a social media post, US President Donald Trump has urged Iranians to continue demonstrations against the Islamic Republic’s regime led by Supreme Leader Ayatollah Ali Khamenei.

He also said that all meetings with Iranian officials had been cancelled, raising the prospect of a US intervention, market analysts noted.

“Markets are on high alert” following the latest escalation in Iran, according to Price Futures Group’s senior market analyst Phil Flynn.

Downward pressure:

Brent’s price has felt some downward pressure after the American Petroleum Institute (API) reported a huge surge in US crude stocks.

US crude oil inventories increased by a whopping 5.3 million bbls in the week ending 9 January, according to the API report.

Meanwhile, market analysts expected a draw of 2 million bbls.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure on Brent's price.

By Tuhin Roy and Aparupa Mazumder

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