East of Suez Market Update 15 Oct

Most prices in East of Suez ports have moved lower, while supplies of LSMGO and HSFO remain limited in Fujairah.

IMAGE: Vessel docked at berth in Fujairah, UAE. Port of Fujairah

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

• VLSFO prices down in Zhoushan ($27/mt), Fujairah ($12/mt) and Singapore ($3/mt)
• LSMGO prices down in Zhoushan ($21/mt), Singapore ($19/mt) and Fujairah ($12mt)
• HSFO prices up in Singapore ($60/mt), and down in Zhoushan ($15/mt) and Fujairah ($7/mt)

Most regional bunker benchmarks have declined across the three Asian bunker hubs. Conversely, Singapore’s HSFO price has risen by $60/mt over the past day, narrowing the port’s Hi5 spread by $63/mt to $23/mt today.

Singapore’s Hi5 spread is now below Fujairah’s $246/mt and Zhoushan’s $54/mt.

VLSFO availability in Fujairah has slightly improved, despite continued disruptions to vessel traffic through the Strait of Hormuz amid US-Iran tensions, a regional source said. However, supplies of LSMGO and HSFO remain limited there.

Fujairah's fuel oil stocks have averaged 11% lower so far this month than across September, according to data from Fujairah Oil Industry Zone (FOIZ) and S&P Global. The port’s middle distillate stocks have averaged 5% higher in the month so far than across September.

Bunker supply in Zhoushan remains tight, with several suppliers reporting low stocks. Recommended lead times for VLSFO, LSMGO and HSFO stand at around 11 days.

Brent

The front-month ICE Brent contract has dropped by $1.23/bbl on the day, to trade at $104.10/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has felt some upward pressure from a sharp draw in US crude oil inventories.

US crude oil inventories decreased by 11.12 million bbls in the week ending 9 October, according to estimates from the American Petroleum Institute (API).

A draw in US crude stocks typically indicates stronger demand for oil and can support Brent’s price.

Two container ships were struck by unknown projectiles while transiting the Strait of Hormuz, the United Kingdom Maritime Trade Operations (UKMTO) agency reported yesterday. Both vessels reported minor damage and continued their passage.

Iran’s focus is shifting beyond the Strait of Hormuz, with attacks on vessels in the Gulf of Oman and around the port of Fujairah becoming more common, ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent crude’s price has pressure weighing it down after the US signalled it could ease sanctions on shadow fleet vessels.

The Donald Trump-led US administration is considering easing sanctions on vessels that have carried oil from countries including Russia, Iran and Venezuela, in a bid to cut record freight costs, Reuters reported citing a US official.

Recovering supply from the Persian Gulf has also capped Brent’s gains today. Crude oil exports from Gulf producers rose by 4.4 million b/d to 13.90 million b/d in September, more than 75% of pre-war levels, the International Energy Agency (IEA) said in its monthly oil market report yesterday.

The IEA also expects global oil demand to fall by 2.60 million b/d this year, as higher oil prices and a weaker economic outlook weigh on consumption.

By Shilpa Sharma and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online