East of Suez Market Update 8 Jan

Prices in East of Suez ports have been rangebound, and bunker demand is low in China’s Zhoushan.

IMAGE: Yangshan harbour of Shanghai, China. Getty Images

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

• VLSFO prices up in Singapore ($4/mt), and unchanged in Fujairah and Zhoushan
• LSMGO prices unchanged in Zhoushan, and down in Fujairah ($3/mt) and Singapore ($2/mt)
• HSFO prices up in Zhoushan ($4/mt), unchanged in Singapore, and down in Fujairah ($1/mt)
• B30-VLSFO at a $265/mt premium over VLSFO in Singapore
• B30-VLSFO at a $275/mt premium over VLSFO in Fujairah

VLSFO prices have stayed largely rangebound across the three key Asian bunker hubs over the past day. Zhoushan continues to trade at notable premiums, standing $27/mt above Fujairah and $26/mt above Singapore.

In Zhoushan, most suppliers are currently recommending lead times of 5–8 days for all grades amid muted demand. This marks a slight shift from last week, when several suppliers were quoting 4–7 days for smaller parcels across all grades, while larger stems of more than 1,500 mt required longer windows of around 6–10 days.

Across northern China, fuel availability remains uneven. Dalian and Qingdao have sufficient supplies of VLSFO and LSMGO, although HSFO remains tight in Qingdao. In Shanghai, supplies of VLSFO and HSFO continue to be limited, while LSMGO availability is stable.

Further south, both VLSFO and LSMGO supplies are tight in Fuzhou. 

Brent

The front-month ICE Brent contract has dipped by $0.10/bbl on the day, to trade at $60.10/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent's price has gained some upward momentum after the US Energy Information Administration (EIA) reported a big draw in US crude inventories.

US crude stocks fell by 3.8 million barrels in the week ending 2 January, according to the EIA weekly oil inventory report.

A drawdown in crude inventories is typically interpreted as a sign of healthy demand, lending support to Brent futures.

Downward pressure:

Reports that the US is tightening its grip on Venezuela’s oil exports have reinforced expectations of increased supply. The US seized two oil tankers linked to Venezuela in the Atlantic Ocean on Wednesday, including one sailing under the Russian flag, as part of President Donald Trump’s forceful effort to control oil movements across the Americas and pressure Venezuela’s socialist government into alignment, Reuters reported.

The development has continued to weigh on Brent futures.

“Developments around Venezuela continue to grab headlines, putting further pressure on oil prices,” two analysts from ING Bank said.

“The control that the US intends to exert over the Venezuelan oil industry also raises questions over the future of Venezuela’s membership within OPEC,” they added.

By Tuhin Roy

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