East of Suez Market Update 30 June

Most bunker prices across East of Suez ports have moved up, and LSMGO and HSFO availability is tight in Malaysia’s Port Klang.

IMAGE: An old wooden cargo ship setting out from Port Klang. Getty Images

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

• VLSFO prices up in Singapore ($22/mt), and down in Fujairah ($44/mt) and Zhoushan ($23/mt)
• LSMGO prices up in Singapore ($29/mt), Zhoushan ($21/mt) and Fujairah ($6/mt)
• HSFO prices up in Singapore, Zhoushan ($7/mt) and Fujairah ($5/mt)

Singapore's VLSFO price has climbed by $22/mt over the past day, while benchmark prices in Zhoushan and Fujairah have declined. As a result, Singapore's VLSFO has shifted from a discount to a slight $8/mt premium over Zhoushan, while it continues to trade at a substantial $147/mt discount to Fujairah.

VLSFO availability in Singapore remains tight, with recommended lead times continuing to vary significantly among suppliers. While some can deliver in around nine days, others are quoting lead times of more than four weeks. Although the lower end of the range is unchanged, the upper end has extended from around three weeks previously.

Recommended lead times for HSFO have tightened to 7–11 days, compared with 5–13 days last week. For LSMGO, suppliers are advising lead times of 3–8 days, versus 6–10 days a week earlier.

Bunker fuel availability in Malaysia's Port Klang remains uneven. VLSFO supply is generally adequate, particularly for smaller prompt stems. However, LSMGO availability remains constrained due to limited supply, while HSFO continues to face supply pressure, leaving both grades relatively tight.

Brent

The front-month ICE Brent contract has gained by $0.32/bbl on the day, to trade at $72.89/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has traded higher this week, as crude oil movement through the Strait of Hormuz faced some constraints after Iran struck two commercial vessels with drones over the weekend.

The Panama-flagged oil tanker M/T Kiku, and the Singapore-registered container ship Ever Lovely, came under attack after Iran’s navy issued a warning to commercial vessels last week, cautioning them against using unauthorised routes to transit the strait.

“Crude oil prices gained as renewed fighting in the Middle East raised concerns about the sustainability of oil supplies flowing through the Strait of Hormuz,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

In response to these vessel attacks, the US Central Command (CENTCOM) launched strikes on Iranian military targets, including air defense sites and surveillance infrastructure. 

“Traffic through the Strait remains well below last week's post-war peak,” VANDA Insights’ founder Vandana Hari commented.

Downward pressure:

Brent’s price has felt some downward pressure from the latest positions data, as money managers and hedge funds decreased their net-long bets on ICE Brent futures over the last reporting week.

Speculators sold more than 23,000 lots as of 23 June, decreasing net-long positions in Brent futures to a little over 90,000 lots, according to futures and options data from ICE Futures Europe.

When speculators reduce net-long positions, prices tend to decline. Conversely, when they boost these positions, oil prices typically rise, leading to a cycle where their actions can influence oil prices and the market.

By Tuhin Roy and Aparupa Mazumder

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