Global Market Update 23 Dec

Bunker prices in major international ports have mostly gained, and fuel availability is very tight across all grades in Fujairah.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Fujairah ($11/mt), Houston, Rotterdam ($9/mt), Singapore ($6/mt) and Gibraltar ($3/mt)
• LSMGO prices up in Rotterdam ($21/mt), Fujairah ($11/mt), Gibraltar ($4/mt) and Houston ($3/mt), and down in Singapore ($8/mt)
• HSFO prices up in Gibraltar ($11/mt), Fujairah, Rotterdam ($9/mt) and Houston ($3/mt), and down in Singapore ($4/mt)
• B30-VLSFO at a $268/mt premium over VLSFO in Singapore
• B30-VLSFO at a $282/mt premium over VLSFO in Fujairah
• B30-VLSFO at a $379/mt premium over VLSFO in Gibraltar

Most bunker fuel grades across major global markets have largely tracked Brent’s upward move.

At the UAE's Port of Fujairah, the price of VLSFO has recorded the sharpest gains in the previous session. The benchmark has drawn support from a 500-1500 mt VSLFO stem, fixed at $433/mt, for prompt delivery today.

Bunker fuel supply at Fujairah is “super tight” across all grades this week, a source said. Most suppliers are not entertaining bigger VLSFO stems due to “instability of the market” and shortage of cargo, the source added.

Similarly, prompt supplies of all fuel grades remain tight in the ARA, with buyers advised to enquire about a week in advance to get offers from a wide set of suppliers, a trader told ENGINE.

In the past session, a steep increase in Rotterdam’s LSMGO price has narrowed its discount to Gibraltar's LSMGO price. A higher-priced 50-150 mt stem, fixed at $612/mt, has provided support to the benchmark.

Houston’s VLSFO price has also gained in the past day. However, the port continues to remain closed to all vessel traffic due to dense fog and reduced visibility.

Nearby ports, including Corpus Christi, Freeport (Texas), Galveston and Beaumont/Port Arthur, have also suspended traffic amid dense fog. This prolonged closure can result in disrupting both bunker deliveries and fuel reloading schedules, a bunker trader told ENGINE.

Brent

The front-month ICE Brent contract has gained by $0.97/bbl on the day, to trade at $62.06/bbl, at 09.00 GMT today.

Upward pressure:

Brent crude’s price has moved higher after official drilling figures showed a decline in US oil rigs. The total number of oil rigs fell by eight over the week to 406, according to Baker Hughes.

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.

In a tight market, any signal of reduced future supply can put upward pressure on Brent’s price.

Additionally, oil prices have risen amid growing concerns over supply disruptions from Venezuela. Earlier this week, the US government intercepted an oil tanker off Venezuela’s coast, triggering fresh supply-related worries in the market.

Downward pressure:

Meanwhile, the US-mediated ceasefire talks between Russia and Ukraine have shown no tangible progress this week.

This has resulted in a broadly bearish takeaway for the oil market, according to analysts.

There are no signs of “further escalation or rhetoric capable of driving crude’s Russia risk premium higher,” VANDA Insights’ founder Vandana Hari said.

By Aparupa Mazumder, Gautamee Hazarika and Nachiket Tekawade

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