East of Suez Market Update 25 Nov

Prices in East of Suez ports have moved in mixed directions, and bad weather has halted bunkering operations across all Zhoushan anchorages this morning.

IMAGE: Heavy cranes at Ningbo-Zhoushan port. Getty Images

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

• VLSFO prices up in Zhoushan ($9/mt), and down in Fujairah ($6/mt) and Singapore ($5/mt)
• LSMGO prices up in Singapore ($12/mt), and down in Zhoushan ($14/mt) and Fujairah ($6/mt)
• HSFO prices up in Zhoushan ($8/mt), Singapore ($5/mt) and Fujairah ($1/mt)
• B30-VLSFO at a $252/mt premium over VLSFO in Singapore
• B30-VLSFO at a $269/mt premium over VLSFO in Fujairah

Zhoushan’s VLSFO price has risen by $9/mt in the past day, while prices in Fujairah and Singapore have slipped. This has widened Zhoushan’s VLSFO premium over Fujairah by $15/mt to $35/mt, and over Singapore by $14/mt to $32/mt.

Zhoushan’s LSMGO price has dropped by $14/mt — a larger decline than Fujairah's benchmark — while Singapore’s LSMGO price has increased. Zhoushan's LSMGO is now at discounts of $41/mt and $25/mt to Singapore and Fujairah, respectively.

Demand in Zhoushan remains muted, with suppliers now indicating delivery dates in early December for all grades, compared with last week’s shorter 4–6-day guidance.

Adverse weather conditions have introduced further delays: bunkering at the port’s outer and inner anchorages has been suspended since this morning. Operations are expected to resume tomorrow as the weather is forecast to improve, a source said.

In Hong Kong, lead times for all grades remain around seven days.

Brent

The front-month ICE Brent contract has gained by $0.63/bbl on the day, to trade at $62.83/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has moved higher following comments from US Federal Reserve (Fed) policymakers on the prospects of a final rate cut before the year ends.

Fed Governor Christopher Waller said the US labour market has softened to justify a final 25-basis-point cut at the central bank’s meeting next month, Reuters reported.

“[Market] expectations of a Fed rate cut were boosted by dovish comments from central bankers,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Lower interest rates in the US can boost demand, making dollar-denominated commodities like oil cheaper for holders of other currencies.

"Waller fuelled optimism of a rate cut in December, saying concerns about the labour market warrant advocating for a cut at the next meeting," Hynes said.

The US Fed is scheduled to hold its Federal Open Market Committee (FOMC) meeting on 10 December.

Downward pressure:

Brent’s price has come under some downward pressure as market analysts continue to assess the potential impact of a Russia–Ukraine ceasefire – which is now in its third year.

Washington has modified its proposed 28-point plan to achieve a ceasefire deal between Kyiv and Moscow, after European leaders viewed the proposal as leaning in favour of Moscow.

The US administration has claimed that progress has been made in the ceasefire plan that could potentially end the conflict.

According to oil market analysts, these developments could pave the way for easing sanctions on Russian crude, adding more barrels to an already oversupplied market.

Oil prices declined “on the prospect of more supply hitting the market amid easing geopolitical tensions,” Hynes added.

By Tuhin Roy and Aparupa Mazumder

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