East of Suez Market Update 6 Feb

Prices in East of Suez ports have moved in mixed directions, and availability is good across all grades in several Sri Lankan ports.

IMAGE: Container ship at Colombo port, Sri Lanka. Getty Images

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

• VLSFO prices up in Fujairah ($2/mt) and Zhoushan ($1/mt), and down in Singapore ($6/mt)
• LSMGO prices down in Singapore ($9/mt), Zhoushan ($3/mt) and Fujairah ($2/mt)
• HSFO prices up in Fujairah ($1/mt), and down in Singapore ($5/mt) and Zhoushan ($1/mt)
• B30-VLSFO prices up in Singapore ($16/mt) and Fujairah ($8/mt)

VLSFO prices across the three major Asian bunker ports have remained broadly rangebound over the past day. Zhoushan’s VLSFO continues to trade at premiums of $27/mt and $15/mt over Fujairah and Singapore, respectively.

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

In Hong Kong, bunker lead times for all fuel grades remain stable at around seven days, broadly in line with recent weeks. In Sri Lanka, bunker supply is good. A supplier operating in both Colombo and Hambantota is advising lead times of approximately five days for all grades. 

Brent

The front-month ICE Brent contract has remained unchanged on the day, to trade at $68.24/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude's price has found support after the US Energy Information Administration (EIA) released its latest weekly oil inventory data.

US commercial crude stocks fell by 3.5 million bbls to 420.3 million bbls in the week ending 30 January, a decline that is commonly seen as a sign of stronger demand.

Brent futures have also been buoyed by a trade agreement between the US and India, under which India has agreed to increase purchases of US oil while cutting imports of Russian crude.

If the agreement is implemented, it could prompt Moscow to curb production, tightening global oil supply, according to two analysts at ING Bank.

Downward pressure:

Oil prices have come under downward pressure as supply concerns eased and market attention shifted to the outcome of US–Iran talks expected later in the day.

Crude futures faced downward pressure “amid signs of easing supply risks. Iran confirmed that it would hold negotiations with the US, allaying concerns of US military action which could threaten oil exports from the OPEC member,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

“Aside from the US–Iran talks, there is little else on the market radar to sway price sentiment, and some mixed signals in the physical market, effectively cancelling each other out,” added Vandana Hari, founder of VANDA Insights.

By Tuhin Roy

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