Bunker prices in East of Suez ports have come down, and prompt availability of all grades remain tight in Fujairah.

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

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

• VLSFO prices down in Fujairah and Zhoushan ($19/mt) and Singapore ($13/mt)
• LSMGO prices down in Zhoushan ($32/mt), Fujairah ($24/mt) and Singapore ($19/mt)
• HSFO prices down in Zhoushan ($16/mt), and Singapore and Fujairah ($10/mt)

Bunker benchmarks in East of Suez ports have mirrored Brent’s downward trend, decreasing over the past day. VLSFO prices have dropped significantly across the three major Asian bunker ports, ranging from $13-19/mt. Despite this decrease, Fujairah’s VLSFO premiums over Zhoushan and Singapore remain at $10/mt and $9/mt, respectively.

Bunker fuel supply remains constrained in Fujairah, with most suppliers suggesting lead times of around seven days. Improved weather conditions have allowed bunkering operations to resume there, though clearing backlogs caused by recent bad weather may lead to delays, a source says.

LSMGO prices have also fallen sharply across the major Asian bunker ports, with Zhoushan experiencing the steepest decline. Two lower-priced LSMGO stems fixed in Zhoushan within a narrow range of $6/mt have impacted the benchmark. Zhoushan’s LSMGO premium over Singapore stands at $19/mt and at a discount of $82/mt to Fujairah.

Availability of all grades in the Chinese bunkering hub remains good, with advised lead times of 2-5 days, consistent with last week.

All bunker fuel grades are readily available in Hong Kong, with typical lead times of seven days. In Southeast Asia, Malaysia's Port Klang provides readily available VLSFO and LSMGO grades, with some suppliers able to offer prompt dates for smaller parcel sizes.

Brent

The front-month ICE Brent contract plunged $3.0/bbl lower on the day, to trade at $86.68/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent futures continued to draw support from growing geopolitical tensions in the Middle East.

Oil market analysts are bidding on the chances of Israel's retaliation against the drone attack launched by Iran on 13 April. Any direct attack on Iranian oil facilities can put oil supplies under pressure and move Brent’s prices up again, analysts said.

“There's no denying that the Middle East remains a volatile region, akin to a powder keg resting atop smouldering embers,” said SPI Asset Management’s managing partner Stephen Innes.

Iran is OPEC’s third-largest crude oil producer with daily output slated above 3 million b/d, according to the group’s latest oil market report.

Downward pressure:

Brent futures plummeted after the US Energy Information Administration (EIA) reported a 2.74 million-bbl build in US commercial crude oil inventories to 459.99 million bbls on 12 April - the highest level since June last year.

“A bearish EIA inventory report appears to have been the perfect opportunity for investors to lock in profits after the recent gains,” said ANZ Bank’s senior commodity strategist Daniel Hynes.

The American Petroleum Institute’s (API) inventory report a day earlier was also bearish, suggesting a lacklustre growth in oil demand in the world’s largest oil consuming nation.

Israel's delay in retaliating against Iran's recent attack added additional downward pressure on Brent futures, according to analysts.\

“The lack of an immediate response by Israel to Iran’s weekend attack has seen the market reduce its geopolitical risk premium,” Hynes added.

Brent futures have reverted to levels preceding the 1 April incident, when Israel struck Iran’s consulate in Syria, remarked Vandana Hari, founder and market analyst at Vanda Insights. This shift suggests that “the latest bout of risk premium from heightened Israel-Iran tensions has eroded,” she added.

By Tuhin Roy and Aparupa Mazumder

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