Most prices in East of Suez ports have moved down, and prompt availability of all grades remains tight in China’s Zhoushan.

PHOTO: Aerial view of container terminal in port of Tianjin, China. Getty Images

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

• VLSFO prices down in Zhoushan ($7/mt), Fujairah ($6/mt) and Singapore ($4/mt)
• LSMGO prices down in Singapore ($18/mt), Zhoushan ($3/mt) and Fujairah ($2/mt)
• HSFO prices up in Fujairah ($7/mt), and down in Zhoushan ($3/mt) and Singapore ($2/mt)

Most bunker benchmarks in East of Suez ports have decreased in the past day. Zhoushan’s VLSFO price has dropped by $7/mt, marking the most significant decline among three major Asian bunker ports. A lower-priced VLSFO stem fixed in Zhoushan has contributed to pull down the benchmark. Zhoushan’s VLSFO price is currently at a marginal discount of $6/mt to Fujairah's and at near parity levels with Singapore's VLSFO.

Availability for all grades in Zhoushan has been affected due to tight barge availability. Several suppliers are advising lead times of 4-8 days for VLSFO and LSMGO, and 6-7 days for HSFO.

In northern China, Dalian port boasts plentiful availability of VLSFO and LSMGO. Similarly, Qingdao and Tianjin also offer abundant availability of VLSFO and LSMGO, with limited HSFO supply in both ports. VLSFO and LSMGO supply has seen improvement in Shanghai, although HSFO remains constrained. In Fuzhou and Yangpu, both VLSFO and LSMGO are readily available. However, in Guangzhou, prompt delivery dates for low-sulphur fuel grades are constrained. VLSFO availability is under pressure in Xiamen, while LSMGO supply remains normal.

In Hong Kong, all grades of bunker fuel are readily available, with recommended lead times of seven days.

Brent

The front-month ICE Brent contract gained $0.08/bbl on the day, to trade at $88.22/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent futures inched higher after the US Energy Information Administration (EIA) reported a massive drop in crude stocks. Commercial crude oil inventories in the US dropped by 6.37 million bbls to 453.63 million bbls in the week ended 19 April, the EIA reported.

Tensions in the Middle East are expected to grow as Israel may soon launch further ground and air assaults on southern Gaza’s Rafah region, Reuters reported. This news has rekindled concerns about the spillover of the Middle Eastern conflict that could disrupt oil flows in the region, analysts said.

“An escalation in proxy conflicts could translate into increased shipping disruptions in the Red Sea, while a more direct conflict between these countries would likely result in large quantities of oil supply coming offline,” J. P. Morgan’s global market strategist Jack Manley said.

Downward pressure:

Despite the decline in US crude inventories, distillate stocks, which include diesel and gasoil, rose by 1.61 million bbls to 117 million bbls, the EIA reported.

Higher distillate stocks have sparked concerns about a slowdown in oil products demand and sluggish economic growth.

“A supportive 6.4m bbl [6.4 million bbls] stock drop reported by the EIA was offset by slowing end user demand for both gasoline and diesel,” Saxo Bank’s strategy team wrote in a client note.

By Tuhin Roy and Aparupa Mazumder

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