East of Suez Market Update 6 May

Bunker fuel prices in East of Suez ports have followed Brent’s downward trail, while availability of all grades remains tight in Fujairah.

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

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

• VLSFO prices down in Zhoushan ($43/mt), Fujairah ($42/mt) and Singapore ($30/mt)
• LSMGO prices down in Zhoushan ($142/mt), Fujairah ($112/mt) and Singapore ($110/mt)
• HSFO prices down in Zhoushan ($43/mt), Singapore ($41/mt) and Fujairah ($38/mt)
• B30-VLSFO price down in Singapore ($68/mt)

Fujairah’s LSMGO price has declined by over $100/mt in the past session. Despite the price drop, the port's LSMGO benchmark is at premiums of $137/mt and $287/mt over Zhoushan and Singapore.

Prompt bunker availability in Fujairah is very tight across all grades, according to a source. The tightness is largely due to a lack of incoming imports amid the ongoing war in the Middle East, the source added

In China’s Zhoushan port, both VLSFO and HSFO benchmarks have fallen by $43/mt, with the Hi5 spread at $108/mt.

At $108/mt, Zhoushan’s Hi5 spread remains below Singapore’s $127/mt and Fujairah’s $204/mt.

Availability in Zhoushan has tightened across all fuel grades, with several suppliers reporting low stocks.

Brent

The front-month ICE Brent contract has declined by $9.41/bbl on the day, to trade at $103.29/bbl, at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has felt some upward pressure after the American Petroleum Institute (API) reported a sizeable decline in US crude stocks.

US crude oil inventories fell by 8.1 million bbls in the week ending 1 May, according to estimates by the API.

A decline in US crude stocks typically indicates improvement in demand for oil and can put some upward pressure on Brent's price.

Downward pressure:

Brent crude’s price has lost nearly $10/bbl in the previous session following media reports suggesting a ceasefire deal between the US and Iran could be reached soon.

“The oil market has come under renewed pressure as the US-Iran ceasefire appears to still be holding despite a recent flare-up in tensions,” two analysts from ING Bank said.

​A report by Axios stated the US and Iran are finalising a one-page memo to end the Middle East conflict – sending oil prices lower.

Earlier today, US President Donald Trump said that progress has been made toward reaching a ceasefire deal with Tehran.

“Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran,” Trump wrote on social media platform Truth Social.

By Aparupa Mazumder

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