East of Suez Market Update 20 Aug

Most regional bunker benchmarks have risen, while availability of all grades remains good in Hong Kong.

IMAGE: 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 up in Singapore ($16/mt), and down in Fujairah ($13/mt) and Zhoushan ($8/mt)
• LSMGO prices up in Fujairah ($37/mt), Singapore ($30/mt) and Zhoushan ($27/mt)
• HSFO prices up in Fujairah ($20/mt), Singapore ($13/mt) and Zhoushan ($12/mt)

Singapore’s VLSFO price has increased by $16/mt over the past day, while prices in Fujairah and Zhoushan have declined. Singapore’s VLSFO is now priced at a $37/mt premium over Fujairah and at a $10/mt discount to Zhoushan.

VLSFO availability in Singapore has improved amid weak demand, with suppliers now recommending lead times of 7-13 days, down from 12-21 days last week. HSFO supply has also eased, with recommended lead times narrowing to 6-13 days from 12-21 days. LSMGO availability has improved further, with lead times falling to 2-8 days from 4-12 days a week earlier.

Meanwhile, Hong Kong’s bunker market remains largely unchanged, with suppliers continuing to recommend lead times of around seven days for all major fuel grades.

Brent

The front-month ICE Brent contract has gained by $1.77/bbl on the day, to trade at $93.67/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price is headed towards the $95/bbl mark, as expectations of a peace accord between Washington and Tehran, leading to the reopening the Strait of Hormuz to commercial navigation, has collapsed completely.

The UAE has indefinitely frozen all trade with Iran, citing security risks, after Tehran's missiles hit Emirati waters.

The US President Donald Trump has threatened the imposition of tougher economic penalties on entities supporting Iranian economic activities, putting upward pressure on commodity prices.

“Oil prices extended their rally amid growing concerns over tighter US sanctions on Iran,” two analysts from ING Bank noted.

Downward pressure:

Brent’s price rally was capped by a surprise rise in US crude stocks.

Commercial US crude oil inventories increased by 4.4 million bbls, to 429 million bbls in the week ending 14 August, according to data from the US Energy Information Administration (EIA).

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

The crude stocks build marked “a third consecutive weekly build and the highest level since May,” ING Bank’s analysts said.

By Tuhin Roy and Aparupa Mazumder

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