East of Suez Market Update 27 Oct

Most prices in East of Suez ports have moved higher, and availability remains tight in Singapore and Port Klang.

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 ($33/mt), Zhoushan ($20/mt) and Fujairah ($9/mt)
• LSMGO prices up in Singapore ($17/mt), Fujairah ($9/mt) and Zhoushan ($8/mt)
• HSFO prices up in Zhoushan ($31/mt), Fujairah ($17/mt), and down in Singapore ($29/mt)

Singapore’s VLSFO price has climbed by $33/mt, the steepest increase among the three major Asian bunker ports. The price now stands at a $5/mt premium over Fujairah and a $26/mt premium over Zhoushan.

Singapore’s Hi5 spread has widened to $122/mt today from $60/mt yesterday. It remains below Fujairah’s $224/mt but above Zhoushan’s $73/mt.

Singapore’s VLSFO monthly average price has risen for three months in a row, from $744/mt in July to $913/mt so far in October. That sits just below March’s $923/mt. The HSFO monthly average price has climbed to $835/mt so far in October from $700/mt in September, the highest monthly average since November 2021. The monthly average Hi5 spread has narrowed to $78/mt this month from $208/mt in July.

Bunker fuel availability remains tight in Singapore, with constrained fuel oil inventories. Reduced supply flows and tightening inventories across East of Suez continue to weigh on availability at the port.

VLSFO lead times start at around 13 days at the earliest, and some suppliers recommend more than three weeks. Lead times were 12-15 days last week. HSFO lead times stand at around 10 days but stretch to as long as three weeks, almost unchanged from last week. LSMGO needs 9-11 days, compared with 7-14 days last week.

Bunker supply in Port Klang, Malaysia, stays constrained across multiple grades. Prompt VLSFO availability is particularly tight, LSMGO supply is limited and HSFO availability faces continued pressure.

Brent

The front-month ICE Brent contract has gained by $1.20/bbl on the day, to trade at $115.68/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has felt upward pressure as speculators have raised their bullish bets and supply concerns in the Middle East persist.

Money managers and hedge funds bought a little short of 9,000 lots in the week to 20 October, increasing their net-long positions in ICE Brent futures to over 241,000 lots, according to futures and options data from ICE Futures Europe.

When speculators boost net-long positions, oil prices typically rise.

Persian Gulf crude exports have fallen to 14.30 million b/d, while oil flows through the Strait of Hormuz are running at just 60% of normal levels, ANZ Bank’s senior commodity strategist Daniel Hynes said.

The oil market’s resilience “remains under acute pressure”, Hynes added.

Downward pressure:

Brent’s gains have been capped by renewed diplomatic efforts to ease tensions in the Middle East.

Senior officials from Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran yesterday, and the four countries agreed to continue talks, Reuters reported, citing Iranian state media.

By Tuhin Roy and Aparupa Mazumder

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