East of Suez Market Update 30 Jan

Fuel prices in East of Suez ports have moved in mixed directions, and availability of all grades is tight in Fujairah.

IMAGE: Bunker barge at berth in Fujairah, UAE. Port of Fujairah

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

• VLSFO prices unchanged in Fujairah, and down in Singapore and Zhoushan ($6/mt)
• LSMGO prices down in Fujairah, Zhoushan ($3/mt) and Singapore ($1/mt)
• HSFO prices up in Singapore, Zhoushan ($3/mt), and unchanged in Fujairah
• B30-VLSFO at a $260/mt premium over VLSFO in Singapore
• B30-VLSFO at a $291/mt premium over VLSFO in Fujairah

Singapore’s HSFO price has increased over the past day, driven by a higher-priced 500–1500 mt stem fixed at the port.

Meanwhile, a lower-priced 50-150 mt LSMGO stem fixed at Singapore has pushed the grade lower – bringing the port’s LSMGO price to a discount of $101/mt to Fujairah and $30/mt to Zhoushan.

Prompt VLSFO availability is tight in Singapore, with recommended lead times of 12-14 days. HSFO lead times are at around 9-12 days, while LSMGO is more readily available in 7-9 days.

In the Middle East, prompt bunker supply in Fujairah remains tight across all fuel grades. Several suppliers project lead times of 5-7 days for all grades. Similar supply pressures are also being reported at the UAE port of Khor Fakkan.

In Iraq’s Basrah port, VLSFO and LSMGO are readily available, while HSFO supply remains limited. At Jeddah, availability of both VLSFO and LSMGO has improved.

Brent

The front-month ICE Brent contract has gained by $0.27/bbl on the day, to trade at $70.08/bbl, at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has continued to draw some support as tensions build between the US and Iran amid US President Donald Trump's threats to attack the OPEC nation.

The oil market is becoming “increasingly nervous” over potential US strikes if Iran does not make a deal regarding its nuclear ambitions, two analysts from ING Bank noted.

Iran produces about 3.2 million b/d of crude oil, so any escalation could potentially disrupt supply from the Middle Eastern region, according to market analysts.

“Iran accounts for about 3% of global supply. It’s clear that the market is now pricing in a geopolitical risk premium amid the risks to supply disruptions,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent’s price has come under downward pressure on some easing supply concerns.

Earlier this week, Kazakhstan’s pipeline operator Caspian Pipeline Consortium (CPC) said full loading operations have resumed at its Black Sea terminal, after maintenance was completed on one of three mooring points.

Loadings were previously suspended after the mooring points were damaged in a Ukrainian drone strike.

“With this repair work complete, loadings should normalise, helping to ease some of the tightness,” ING Bank analysts said.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online