East of Suez Market Update 16 Feb

Most prices in East of Suez ports have moved up, and bunkering activity is expected to remain muted during the Chinese New Year holiday in Zhoushan.

IMAGE: An aerial view of Taichung Port. Taiwan Free Trade Zone 1

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

• VLSFO prices up in Fujairah ($5/mt), Singapore ($4/mt), and unchanged in Zhoushan
• LSMGO prices up in Fujairah ($21/mt), Singapore ($5/mt) and Zhoushan ($3/mt)
• HSFO prices up in Fujairah ($11/mt), Singapore ($10/mt), and unchanged in Zhoushan
• B30-VLSFO prices up in Singapore ($9/mt) and Fujairah ($5/mt)

Prices across all grades in Zhoushan have remained broadly steady over the weekend. Zhoushan’s VLSFO continues to trade at premiums of $27/mt over Fujairah and $15/mt over Singapore.

Availability across all grades remains tight despite muted demand, with several suppliers quoting lead times of 7–10 days, unchanged from last week.

Bunkering activity across Zhoushan is expected to stay subdued during the Chinese New Year holiday period from 15–23 February, as several suppliers have suspended operations. No new stems will be booked during this period, and only previously booked stems will be delivered, according to a source.

In Taiwan, delivery of fresh bunker stems at several ports will also be temporarily suspended during the Chinese New Year holidays. New stem deliveries will be halted from 16–18 February at Keelung, Taichung and Suao ports. The suspension will run slightly longer at Hualien Port, from 16–19 February, according to state-owned CPC Corporation. During these periods, only pre-booked stems will be delivered.

In contrast, bunkering operations at Kaohsiung Port will continue as normal throughout the holiday period.

Brent

The front-month ICE Brent contract has lost by $0.17/bbl on the day from Friday, to trade at $67.42/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Oil has retained some ground after official drilling figures showed a decline in US oil rigs.

The total number of oil rigs declined by three over the week at 409, 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 a tight market, any signal of reduced future supply can put upward pressure on Brent’s price.

Downward pressure:

Brent crude’s price has come under downward pressure as market participants remained focused on the upcoming US-Iran nuclear talks, that is expected to ease supply-related concerns.

Representatives from both nations will hold a second round of talks in Geneva tomorrow, Reuters reported.

The talks primarily aim to discuss Tehran’s nuclear enrichment programme – something Washington has consistently opposed.

Iran is expected to reach an agreement with the US that could benefit both countries economically, Reuters further reported citing an Iranian diplomat.

The global oil market is facing considerable uncertainty, “over how the situation between the US and Iran evolves,” two analysts from ING Bank noted.

By Tuhin Roy and Aparupa Mazumder

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