East of Suez Market Update 8 June

Bunker fuel prices in East of Suez ports have tracked Brent’s upward movement, and VLSFO availability is very tight in Fujairah.

IMAGE: Bunker barge at berth in Fujairah, UAE. Port of Fujairah

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

• VLSFO prices up in Fujairah ($116/mt), Singapore ($28/mt) and Zhoushan ($20mt)
• LSMGO prices up in Fujairah ($80/mt), Singapore ($44/mt) and Zhoushan ($17/mt)
• HSFO prices up in Zhoushan ($13/mt), Fujairah ($10/mt) and Singapore ($1/mt)
• B30-VLSFO price up in Singapore ($42/mt)

Fujairah’s VLSFO price has surged by $116/mt over the weekend, marking the largest increase among the three major Asian bunker hubs for a fourth consecutive day. Fujairah’s VLSFO is currently trading at premiums of $381/mt and $399/mt over Singapore and Zhoushan, respectively.

Meanwhile, Fujairah’s HSFO price has recorded a much smaller rise – widening the port’s Hi5 spread from $417/mt to $523/mt. At $523/mt, Fujairah’s Hi5 spread remains well above Singapore’s $177/mt and Zhoushan’s $124/mt.

Bunker availability in the UAE ports of Fujairah and Khor Fakkan remains tight, with only few suppliers offering parcels, a trader told ENGINE.

Only one supplier has stocks of VLSFO and LSMGO in Fujairah, with most offers issued on a firm enquiry basis. Two suppliers are able to provide HSFO in the port.

In Khor Fakkan, availability remains tight across all fuel grades, with suppliers taking requests on a case-by-case basis.

Brent

The front-month ICE Brent contract has gained by $2.36/bbl on the day from Friday, to trade at $97.36/bbl, at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has opened the week on a higher note after Israel and Iran engaged in hostilities over the weekend.

On Sunday, Israel struck a Hezbollah-controlled command centre in Beirut, Lebanon, its defense forces said. The attack came after the Lebanon-based militant group targeted northern Israel with missiles.

Hours later, Iran and Israel exchanged fire, with the Israel Defense Forces (IDF) striking military sites in western and central Iran.

The attacks have reignited disruption concerns as market analysts flagged its impact on the ongoing peace negotiations between the US and Iran.

“Every military response forces [oil] traders to widen the range of possible outcomes,” SPI Asset Management managing partner Stephen Innes noted.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US increased by two to 431 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Aparupa Mazumder

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