Prices in East of Suez ports have increased, and VLSFO and LSMGO supply remains under pressure in several Indian ports.

PHOTO: Two container ships berthed at a container terminal in Cochin in the Indian state of Kerala. Getty Images

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

• VLSFO prices up in Singapore ($8/mt), Fujairah ($7/mt) and Zhoushan ($5/mt)
• LSMGO prices up in Singapore ($15/mt), Zhoushan ($14/mt) and Fujairah ($11/mt)
• HSFO prices up in Fujairah ($10/mt), Singapore ($5/mt) and Zhoushan ($2/mt)

Bunker benchmarks in East of Suez ports have mirrored Brent’s upward movement. In Singapore, the price of VLSFO has surged by $8/mt, marking the most significant increase among the three major Asian bunker ports. Four VLSFO stems were fixed in Singapore within a wide range of $47/mt in the past day. Stems booked at the higher end of the range supported the benchmark’s rise. Despite the price increase in Singapore, its VLSFO discounts to Fujairah and Zhoushan remain at $9/mt and $4/mt, respectively.

Lead times for VLSFO in Singapore have seen notable fluctuations recently, with most suppliers currently suggesting up to 10 days for the grade, while some can arrange stems within six days.

Prompt HSFO availability in Singapore has improved, with recommended lead times now ranging between 6-10 days, down from 8-14 days last week. For LSMGO, lead times vary widely between 2-8 days in Singapore.

Moving to South Asia, VLSFO and LSMGO availability remains limited in Indian ports, with the majority of suppliers facing supply shortages. Ports including Mumbai, Kandla, Tuticorin, Chennai, Cochin, Visakhapatnam, and Haldia are experiencing shortages of VLSFO and LSMGO, with deliveries subject to availability. A supplier in Paradip on the eastern coast of India is almost out of stock for both grades.

On the flip side, the Sri Lankan port of Trincomalee has ample VLSFO, LSMGO and HSFO supplies.

Brent

The front-month ICE Brent contract moved $0.73/bbl higher on the day, to trade at $88.14/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent futures extended gains amid growing concerns about escalation of geopolitical tensions in the Middle East.

“The possibility of further escalation [of tensions] in Eastern Europe and the Middle East remains a key factor driving upside risks in the oil market,” SPI Asset Management’s managing partner Stephen Innes said.

The US House of Representatives voted in favour of a foreign aid bill for Ukraine and Israel. The bill also includes a provision to broaden the current sanctions against Iranian oil.

This bill, which will be passed onto the US Senate and presented to President Joe Biden, “provides for US sanctions on foreign ports, vessel owners and operators, and entities that “knowingly” engage in the transportation, trade or refining of Iranian oil,” Vandana Hari, founder and market analyst at VANDA Insights said.

Brent futures also gained after the American Petroleum Institute (API) reported a decline in US crude stocks. Commercial crude inventories in the US declined by 3.23 million bbls in the week ended 19 April, according to the API.

A decline in US crude stocks indicates that oil demand is improving in the world’s top oil-consuming nation.

Downward pressure:

Downside risk factors acting on oil prices include the possibility of an increase in supply in the global oil market led by non-OPEC producers like the US, with its shale producers continuously ramping up drilling efficiency, analysts said.

Internal conflicts between the OPEC+ coalition could also prompt certain members to release its spare capacity, they added.

“Tensions within the [OPEC+] cartel persist, leading to voluntary cuts by certain members,” Innes said. “The UAE has expressed eagerness to ramp up production. The unity of the cartel largely depends on Saudi Arabia's willingness to continue shouldering a significant portion of the cuts,” he added.

By Tuhin Roy and Aparupa Mazumder

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