VLSFO prices have moved up in East of Suez ports, and availability of all grades remain good in China’s Zhoushan.

PHOTO: Gantry cranes and container ships in Ningbo-Zhoushan. ZJ Seaport

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

• VLSFO prices up in Fujairah ($13/mt), Zhoushan ($2/mt) and Singapore ($1/mt)
• LSMGO prices up in Zhoushan ($14/mt), unchanged in Fujairah, and down in Singapore ($2/mt)
• HSFO prices up in Zhoushan ($10/mt), and unchanged in Singapore and Fujairah

In the past day, Fujairah’s VLSFO price has surged by $13/mt, while Zhoushan and Singapore’s prices have remained stable. Fujairah’s VLSFO price has shifted from near parity levels with both Singapore and Zhoushan to premiums of $15/mt and $10/mt, respectively.

In Fujairah, most suppliers are advising lead times of approximately seven days for all grades. However, bad weather since yesterday has affected terminal loading and barge supplies at the port, impacting truck supply as well. This situation might lead to bunkering delays, according to a source.

A similar situation is observed in Khor Fakkan, with advised lead times of around seven days for all bunker fuel grades.

Zhoushan’s HSFO price has increased by $10 in the past day, while Singapore and Fujairah’s prices remained steady. A higher-priced HSFO stem fixed in Zhoushan in the past day has contributed to dragging the benchmark up. Zhoushan continues to price its HSFO at elevated levels compared to both Fujairah and Singapore. The Chinese bunkering hub’s HSFO premiums over Fujairah and Singapore stand at $24/mt and $13/mt, respectively.

All grades remain in good supply in Zhoushan, with unchanged lead times of 2-5 days.

Brent

The front-month ICE Brent contract lost $0.39/bbl on the day, to trade at $89.68/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Rising tensions between Israel and Iran are driving up Brent futures this week. Several financial institutes and analysts have adjusted their Brent crude price forecasts for the year following Iran's recent attack.

Oil traders are speculating on how Israel would respond to Iran's weekend attack, commented ANZ Bank’s senior commodity strategist Daniel Hynes. The Israeli army chief has indicated that Iran will bear the consequences for the attack. Any escalation from this point onward could disrupt crude movements in the region, causing more volatility in the oil market.

“Tightening fundamentals” from the ongoing OPEC+ production cuts and geopolitical risk premiums will push Brent’s prices during the summer season (April – September), Morgan Stanley’s head of European oil and gas research Martijn Rats said.

The bank raised its price forecast by $5/bbl to $95/bbl for the same period.

Downward pressure:

A stronger-than-expected build in US crude inventories has dragged Brent’s prices lower this morning. US commercial crude inventories gained 4.1 million bbls in the week ended 12 April, according to the American Petroleum Institute (API).

Oil market analysts project a weekly stock build of around 1.65 million bbls. The widely followed US government data on crude oil stockpiles from the EIA is due later today.

API’s data was “somewhat bearish, with a larger-than-expected crude build overshadowing a drawdown in gasoline inventories,” said VANDA Insight’s founder and analyst Vandana Hari.

Brent futures shed further after the US Federal Reserve’s (Fed) chairman Jerome Powell reiterated in his speech that the central bank was still hesitant to cut interest rates anytime soon.

The oil market lost some gains after Powell’s remarks indicated that “interest rates may need to remain elevated for some time,” said SOPI Asset Management’s managing partner Stephen Innes. “The hawkish tone from Powell didn't come as much of a surprise, considering the persistent inflationary challenges,” he added.

Higher interest rates can dampen global demand by increasing the cost of commodities like oil for non-dollar holders.

By Tuhin Roy and Aparupa Mazumder

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