VLSFO prices in Asian ports have moved up, and bunker operations have resumed in Zhoushan’s OPL area today after being suspended since Friday due to adverse weather conditions.

PHOTO: Tokyo Bay at sunset. Getty Images

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

• VLSFO prices up in Zhoushan ($11/mt), Singapore ($8/mt) and Fujairah ($3/mt)
• LSMGO prices up in Zhoushan ($12/mt) and Singapore ($4/mt), and down in Fujairah ($1/mt)
• HSFO prices up in Singapore ($3/mt), unchanged in Zhoushan, and down in Fujairah ($1/mt)

Most bunker benchmarks in three major East of Suez ports have followed Brent’s upward move and gained in the past day. VLSFO prices have gained by $11/mt in Zhoushan - the steepest among all three major Asian ports. Despite Zhoushan’s steep gain, its VLSFO discounts to both Singapore and Fujairah stand at $13/mt.

All grades remain in good supply for prompt dates in Zhoushan, with several suppliers recommending lead times of 2-5 days – largely unchanged from last week. Bunker operations in Zhoushan’s OPL area have resumed today after being shut since Friday due to bad weather conditions, a source said. All anchorages in the Chinese bunkering hub are now operational.

In Malaysia's Port Klang, prompt availability for VLSFO and LSMGO remains good, with several suppliers offering stems for immediate delivery dates. HSFO remains very tight due to the low product availability with suppliers.

Bunker demand remains sluggish across Japanese ports, with lead times ranging from 7-10 days in Tokyo, Chiba, Osaka, and Kobe, to around 13 days in Nagoya and Yokkaichi, and even longer periods of 15-17 days in Mizushima and Oita.

Brent

The front-month ICE Brent contract gained $0.72/bbl on the day, to trade at $86.66/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent futures have risen due to mounting supply concerns, driven by ongoing geopolitical tensions in the Middle East and between Russia and Ukraine.

The heightened tension follows the shutdown of a 70,000 b/d crude unit at Rosneft's Kuibyshev refinery in the Russian city of Samara after a Ukrainian drone attack on Saturday.

“Rosneft’s Kuibyshev oil refinery in Samara shut half its capacity after an attack,” ANZ Bank's senior commodity strategist Daniel Hynes noted. The recent drone attacks on Russian energy facilities led to a 7% decline in the country’s refining capacity, Saxo Bank’s chief China strategist Redmond Wong estimated.

In the Middle East, tensions escalated after a Houthi militia member warned Saudi Arabia and other US-allied nations in a televised interview, stating that any supporter of Israel would be considered a “legitimate target.”

The Russian government also instructed oil companies to reduce crude output in the second quarter to meet the 9 million b/d target set within the OPEC+ alliance, Reuters reported citing three sources.

“Several national officials indicated the [OPEC+] measures are successfully staving off any supply surplus” in the global oil market, Hynes added.

Downward pressure:

The United Nations Security Council (UNSC) adopted a resolution yesterday, urging an immediate ceasefire between Israel and Iran-aligned Hamas militants, also calling for the immediate release of all remaining Israeli hostages.

This development has alleviated some supply concerns in the global oil market, exerting downward pressure on Brent futures.

Meanwhile, oil market analysts are awaiting the release of US inflation data due later this week. The US Federal Reserve (Fed) is widely expected to postpone its interest rate cuts if the inflation remains at higher levels.

Higher interest rates may restrain global oil demand growth, as dollar-denominated commodities like oil become more expensive for non-dollar holders.

By Aparupa Mazumder and Tuhin Roy

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