East of Suez Market Update 3 Feb

Most prices in East of Suez ports have moved up, and VLSFO and LSMGO availability is good across several Taiwanese ports.

IMAGE: Night scene of Zhoushan, close to the dock on Putuo island. Getty Images

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

• VLSFO prices up in Singapore ($13/mt) and Fujairah ($11/mt), and down in Zhoushan ($2/mt)
• LSMGO prices up in Zhoushan ($29/mt), Singapore ($26/mt) and Fujairah ($13/mt)
• HSFO prices up in Zhoushan ($23/mt), Singapore ($15/mt) and Fujairah ($5/mt)
• B30-VLSFO prices up in Singapore ($14/mt) and down in Fujairah ($1/mt)

VLSFO prices in Singapore and Fujairah have risen by $13/mt and $11/mt, respectively, over the past day, while the grade's price in Zhoushan has remained largely unchanged. As a result, Zhoushan’s VLSFO premium over Singapore has been eliminated, and its premium over Fujairah has narrowed by nearly half to $16/mt.

Zhoushan’s HSFO price has increased by $23/mt, the steepest increase among the three ports, narrowing the Hi5 spread by $25/mt to $29/mt. This is still lower than Hi5 spreads in Fujairah at $52/mt and Zhoushan at $59/mt.

VLSFO supply in Zhoushan has improved, with several suppliers now quoting lead times of around five days, down from more than seven days last week. HSFO availability remains tight, with recommended lead times of about seven days, largely unchanged from the previous week. LSMGO supply is ample, with lead times of 3–5 days, also steady week on week.

Across Taiwan, lead times for both VLSFO and LSMGO remain broadly stable. Deliveries at Keelung, Taichung, Kaohsiung and Hualien continue to require around two days of advance notice, unchanged from last week.

Brent

The front-month ICE Brent contract has inched $0.23/bbl lower on the day, to trade at $65.61/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has felt some upward pressure after Washington and New Delhi struck a deal yesterday, that is expected to reduce US tariffs on Indian imports from 25% to 18%.

US President Donald Trump said that India has agreed to buy more US oil and reduce its imports of Russian crude.

If implemented, the move could force Moscow to reduce output, ultimately tightening the global market, according to two analysts from ING Bank.

Moreover, lower tariffs have eased concerns over further trade restrictions between the world’s two major oil consumers, reducing fears of a drag on global economic growth.

Downward pressure:

Brent crude has extended recent losses as geopolitical concerns from the Middle East continue to ease.

Earlier this week, Trump said Iran is “seriously talking” with Washington. “Oil prices have fallen due to reduced risk after President Trump stepped back from attacking Iran,” Price Futures Group’s senior market analyst Phil Flynn said.

Iran is the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil. A US military intervention could potentially threaten oil supply flows from the Middle East, according to market analysts.

“President Trump downplayed threats from Iran’s supreme leader, Ayatollah Ali Khamenei, of a regional war, reiterating that he’s hopeful they’ll make a deal,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.

By Tuhin Roy and Aparupa Mazumder

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