East of Suez Market Update 5 Oct

Prices have risen in all three major East of Suez ports, and bunker availability is tight in Zhoushan.

IMAGE: Aerial view of Zhoushan City, Zhejiang Province. Getty Images

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

• VLSFO prices up in Fujairah ($71/mt), Zhoushan ($55/mt) and Singapore ($42/mt)
• LSMGO prices up in Fujairah ($161/mt), Zhoushan ($90/mt) and Singapore ($21/mt)
• HSFO prices up in Singapore ($56/mt), Zhoushan ($55/mt) and Fujairah ($27/mt)
• B30-VLSFO prices up in Singapore ($31/mt)

Zhoushan's VLSFO price has climbed by $55/mt, with HSFO matching that rise and LSMGO rising by $90/mt. The VLSFO price now stands at a $50/mt premium over Singapore and a $32/mt discount to Fujairah.

Zhoushan's Hi5 spread is unchanged at $54/mt, as VLSFO and HSFO rose by the same amount. Fujairah's Hi5 spread has widened from $239/mt to $283/mt, while Singapore's has narrowed from $131/mt to $117/mt.

Zhoushan's HSFO prices are averaging more this month than in any month since November 2021.

Availability remains tight in Zhoushan, where several suppliers are running low on stocks. Meanwhile, VLSFO lead times have shortened to 12 days from 14 days, while LSMGO lead times have lengthened to 12 days from 10 days. HSFO lead times have stretched to about 15 days from 14 days.

In Taiwan, VLSFO and LSMGO can be delivered within two days in Keelung, Hualien, Taichung and Kaohsiung, little changed from last week.

Brent

The front-month ICE Brent contract has gained by $3.07/bbl on the day from Friday, to trade at $102.55/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has opened the week above the $100/bbl mark, as more crude oil tankers came under missile and drone attacks within the Strait of Hormuz over the weekend.

At least four separate commercial vessels were struck by unknown projectiles since Friday, while attempting to transit the region, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

One oil tanker was stuck within the Strait of Hormuz yesterday, causing a fire in the engine room. Another vessel, about 4 nautical miles east of Oman, sustained damages on the port side on Saturday, the UKMTO reported.

“There’s still little sign of an end to tensions,” two analysts from ING Bank said. “We have seen an increase in attacks on commercial vessels in the Persian Gulf recently,” the analysts added.

Downward pressure:

Brent’s price has felt some downward pressure following news of the release of another tranche of emergency oil stocks, amidst supply concerns following disruption to Saudi oil deliveries.

The Group of Seven (G7) countries, and their partners, have agreed to collectively release up to 100 million bbls of emergency crude oil stocks over the next four months. The release will be coordinated by the International Energy Agency (IEA).

“Oil prices are under pressure amid plans for additional coordinated releases from strategic reserves,” ING Bank’s analysts said.

The announcement came shortly after the Washington issued another Request for Proposal (RFP) for an exchange of up to 40 million bbls of crude oil from its Strategic Petroleum Reserves (SPR) last week.

The latest G7 action “reflects the growing tightness” in the global oil market, ING Bank’s analysts added. 

By Tuhin Roy and Aparupa Mazumder

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