East of Suez Market Update 2 Oct

Bunker fuel prices in East of Suez ports have moved in mixed directions, and bunker availability is tight in Singapore.

IMAGE: Cargo terminal at the Port of Singapore. Getty Images

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

• VLSFO prices up in Singapore ($18/mt), Zhoushan ($4/mt) and Fujairah ($2/mt)
• LSMGO prices up in Singapore ($37/mt), and down in Zhoushan ($3/mt) and Fujairah ($2/mt)
• HSFO prices up in Singapore ($7/mt), and down in Fujairah ($5/mt) and Zhoushan ($3/mt)
• B30-VLSFO price up in Singapore ($8/mt)

Singapore’s LSMGO price has gained by $37/mt, which is the biggest increase among the three major Asian bunker ports. Despite the sharp gains, Singapore’s LSMGO price stands at discounts of $278/mt and $98/mt to Fujairah and Zhoushan respectively.

Singapore's VLSFO price has gained more than HSFO, widening the port's Hi5 spread from $120/mt to $131/mt.

Singapore's bunker market continues to remain tight, with VLSFO lead times of 10-15 days advised. HSFO availability has tightened further, with current lead times of 10-15 days. LSMGO is available more promptly, with lead times of about five days, compared with 5-7 days previously.

In the HSFO market, Fujairah continues to undercut Singapore and Zhoushan, offering the grade $55-169/mt lower. Bunker supply in Fujairah remains severely restricted as US-Iran tensions continue to disrupt vessel traffic through the Strait of Hormuz, according to a regional source.

Brent

The front-month ICE Brent contract has lost $1.15/bbl on the day, to trade at $99.48/bbl, at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has held fairly steady amid mounting security concerns in the Middle East.

The US Central Command (CENTCOM) has established a new unit in the region, called Task Force Falcon, to deploy one-way attack drones “from above, on, and below the sea".

Military support staff from the US and regional partners, including Bahrain, will jointly conduct the operation, CENTCOM said.

“Crude oil gained as tensions rose in the Middle East,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

The development comes amid news that Washington has sent a third ​aircraft carrier and an additional marine expeditionary unit of up to 10,000 more troops to the Middle East.

“The prospect of renewed attacks by the US were heightened follow a report in the Wall Street Journal that it was sending a third aircraft carrier strike group to the Middle East,” Hynes added.

Downward pressure:

Brent crude’s price has come under downward pressure following reports that Saudi Arabia has resumed crude oil loadings at its Red Sea terminal of Yanbu.

Saudi Arabia has resumed oil tanker loadings from the port of Yanbu after restarting operations on the East-West Pipeline, Reuters reported.

Tanker loadings at Yanbu came to an abrupt halt last month, following ​a drone attack on the key pipeline.

“Oil prices edged lower in early trading… as recovering Middle East export flows helped ease supply concerns,” two analysts from ING Bank noted.

By Aparupa Mazumder

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