East of Suez Market Update 17 Feb

Most prices in East of Suez ports have moved up, and prompt availability is tight across all grades in Fujairah.

IMAGE: Bunker barge at berth in Fujairah, UAE. Port of Fujairah

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

• VLSFO prices up in Fujairah ($8/mt), Zhoushan ($6/mt) and Singapore ($4/mt)
• LSMGO prices up in Fujairah ($4/mt) and Singapore ($2/mt), and down in Zhoushan ($1/mt)
• HSFO prices up in Fujairah ($6/mt), Singapore and Zhoushan ($2/mt)
• B30-VLSFO prices up in Singapore ($10/mt) and Fujairah ($5/mt)

Fujairah’s VLSFO price recorded the sharpest increase among the three main Asian bunker hubs. Even after the uptick, it remains competitively priced as it is trading at a discount of $25/mt to Zhoushan and $8/mt to Singapore.

Prompt supply in Fujairah continues to be tight across all grades. Most suppliers are advising lead times of 5–7 days, though some are able to accommodate urgent stems at a premium, according to market sources. Comparable constraints are reported at Khor Fakkan.

At Port Suez, stocks of VLSFO, LSMGO and HSFO are nearing exhaustion. Weather-related disruptions are also expected to impact bunkering operations at both, Port Suez and Port Said, on 18 February.

Brent

The front-month ICE Brent contract has gained by $0.52/bbl on the day, to trade at $67.94/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has felt upward pressure as tensions continue to build around Iran-US talks.

Iran’s military forces have held drills in the Strait of Hormuz, ahead of the highly anticipated nuclear talks later today, Reuters reported, citing Iran’s semi-official news agency Tasnim.

Market analysts view the move as a sign of Tehran’s willingness to safeguard the vital shipping corridor widely used by global maritime operators, should the negotiations fail to produce a breakthrough.

Oil risk premium continues to build “following Iranian naval drills carried out just ahead of US nuclear talks,” two analysts from ING Bank noted.

Downward pressure:

Representatives from Washington and Tehran will hold a second round of indirect talks in Geneva later today.

If the talks yield a positive outcome, they could ultimately help alleviate supply concerns stemming from the Middle East. Notably, Iran is the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil.

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

Separately, market analysts are eyeing discussions between Russia and Ukraine, that are supposed to resume today.

“The market remains unsettled amid ongoing geopolitical uncertainties, with investors staying cautious due to the pending US-Iran and Ukraine negotiations this week,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

By Tuhin Roy and Aparupa Mazumder

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