VLSFO prices in East of Suez ports have moved up, and prompt availability remains tight in UAE’s Fujairah.

PHOTO: Aerial view of Saudi Arabian port of Jeddah with cargo ships and dry docks. Getty Images

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

• VLSFO prices up in Fujairah ($9/mt), Zhoushan ($7/mt) and Singapore ($1/mt)
• LSMGO prices up in Fujairah ($14/mt) and Singapore ($4/mt), and down in Zhoushan ($3/mt)
• HSFO prices up in Zhoushan ($8/mt), and down in Fujairah ($4/mt) and Singapore ($2/mt)

VLSFO prices in Zhoushan and Fujairah have increased by $7-9/mt over the past day, while the grade's price in Singapore has remained relatively stable. Fujairah's VLSFO price is currently $10/mt higher than Singapore's and at near parity levels with Zhoushan.

Fujairah's LSMGO price has seen a significant rise of $14/mt, while prices in Singapore and Zhoushan have remained steady. Fujairah continues to price its LSMGO at elevated levels compared to both Singapore and Zhoushan, with premiums standing at $131/mt and $93/mt, respectively.

Bunker demand in Fujairah has reduced after a slight increase last week, but prompt availability of all grades remains limited due to adverse weather conditions affecting bunker supply. Suppliers are recommending unchanged lead times of 7-10 days across all grades. Similar lead times are advised in the UAE port of Khor Fakkan.

In Saudi Arabia's Jeddah port, VLSFO and LSMGO supply remains good. However, in Djibouti, some suppliers are facing VLSFO shortages, while LSMGO supply is normal there. LSMGO is readily available in Omani ports such as Sohar, Salalah, Muscat, and Duqm.

Brent

The front-month ICE Brent contract gained $1.04/bbl on the day, to trade at $87.41/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent futures have risen due to ongoing geopolitical tensions in the Middle East.

“The geopolitical backdrop is still very fraught with so many risks at the moment, so clearly we're going to see a lot of volatility until there's a lot more clarity around it," according to ANZ analysts.

The possibility of supply disruptions looms as sanctions on Iranian oil remain a key concern, market analysts said. The US already has oil sanctions in place against Iran.

Lawmakers in Washington are “considering a bill called the Iran-China Energy Sanctions Act,” ING Bank’s head of commodities strategy Warren Patterson said. This bill aims to restrict Iranian oil flows to China.

Heightened tensions in eastern Europe following the US House of Representatives vote in favour of a $61 billion aid package for Ukraine, which will be used to arm its military, has added uncertainty to the global oil market and contributed to supply concerns.

“The Kremlin's response to the promise of new aid to the country Russia is attempting to conquer (Ukraine) could heighten tensions further,” SPI Asset Management’s managing partner Stephen Innes commented.

Downward pressure:

A stronger-than-expected build in US crude inventories has exerted downward pressure on Brent’s price this week.

Commercial crude oil inventories in the US rose by 2.74 million bbls to 459.99 million bbls on 12 April - highest level since June last year, according to the US Energy Information Administration (EIA).

Market analysts are now awaiting the release of US gross domestic product (GDP) figures and March's personal consumption expenditure data, recognised by the Fed as an inflation indicator. Both datasets will be crucial for evaluating the Fed’s path of monetary policy, which could impact oil demand in the country.

By Tuhin Roy

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