East of Suez Market Update 2 Dec

Prices in East of Suez ports have moved in mixed directions, and prompt LSMGO supply is tight at Singapore.

IMAGES: Container ship with working crane bridge in shipyard in Singapore. Getty Images

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

• VLSFO prices down in Zhoushan ($10/mt), Fujairah ($4/mt) and Singapore ($1/mt)
• LSMGO prices up in Zhoushan ($1/mt), and down in Singapore ($58/mt) and Fujairah ($10/mt)
• HSFO prices up in Zhoushan ($5/mt), and down in Fujairah ($8/mt) and Singapore ($7/mt)
• B30-VLSFO at a $249/mt premium over VLSFO in Singapore
• B30-VLSFO at a $276/mt premium over VLSFO in Singapore

Zhoushan’s VLSFO price has fallen by $10/mt — the sharpest drop among the three major Asian bunker hubs. Even after the decline, Zhoushan’s VLSFO still carries premiums of $18/mt over Fujairah and $11/mt over Singapore.

By contrast, the port’s HSFO price has increased since the previous session, narrowing its Hi5 spread by $15/mt to $62/mt. This is below the spreads in Fujairah ($104/mt) and Singapore ($85/mt).

Demand in Zhoushan remains quiet, and suppliers are now advising lead times of 4–7 days for all grades, down from around seven days last week.

Meanwhile, Singapore’s LSMGO price has dropped by $58/mt — a much steeper fall than in Fujairah — and remains broadly unchanged in Zhoushan. Singapore’s LSMGO price is at a discount of $55/mt to Fujairah and $35/mt to Zhoushan.

Lead times for LSMGO in Singapore are around 3–7 days, compared with 2–8 days last week.

Brent

The front-month ICE Brent contract has risen by $0.55/bbl on the day, to trade at $62.97/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Risks from Ukrainian drone strikes on Russian energy facilities and escalating US–Venezuela tensions have contributed to upward pressure on Brent futures.

“Crude oil prices rose after a terminal in the Black Sea was damaged. One of three moorings on a pipeline linking Kazakh oil fields to Russia’s Black Sea coast was damaged by a Ukrainian attack,” said ANZ Bank senior commodity strategist Daniel Hynes.

A senior US official said President Donald Trump has been consulting his top advisers on the pressure campaign against Venezuela. On Saturday, Trump said the airspace above and surrounding Venezuela should be considered “closed in its entirety,” though he gave no further details, according to Reuters.

“The US is also widening its campaign against Venezuela, raising concerns that oil exports may be further impacted,” Hynes added.

On Sunday, OPEC+ reaffirmed a small production increase for December and paused further hikes in the first quarter of next year because of growing fears of a supply glut. The decision remains supportive for oil prices in the near term.

Downward pressure:

Mixed sentiment around US crude and product stock levels has put pressure on oil prices.

Market watchers are now looking ahead to the US Energy Information Administration’s weekly inventory report, due Wednesday.

By Tuhin Roy

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