VLSFO and LSMGO prices in East of Suez ports have moved down, and VLSFO and LSMGO availability remains good across several Australian and Kiwi ports.

PHOTO: An aerial view of Melbourne central business district, Victoria, Australia. Getty Images

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

• VLSFO prices down in Fujairah ($6/mt), Singapore ($3/mt) and Zhoushan ($2/mt)
• LSMGO prices down in Zhoushan ($26/mt), Singapore ($9/mt) and Fujairah ($4/mt)
• HSFO prices up in Zhoushan ($8/mt), unchanged in Singapore, and down in Fujairah ($1/mt)

In the past day, Fujairah's VLSFO prices fell by $6/mt, while VLSFO prices in Singapore and Zhoushan remained relatively stable. Five VLSFO stems have been fixed in Fujairah in a wide range of $22/mt since yesterday, with some stems at the lower end contributing to the dip in the benchmark price. Despite this drop, Fujairah's VLSFO price remains at near-parity levels with both Zhoushan and Singapore's VLSFO prices.

Overall, bunker demand in Fujairah has been low. Despite lower demand, prompt availability remains tight across all grades in Fujairah, with most suppliers recommending unchanged lead times of around 7-10 days.

Zhoushan's LSMGO prices have dropped by a significant $26/mt in the past day, while Singapore and Fujairah's LSMGO prices fell marginally. A lower-priced LSMGO stem fixed in Zhoushan has contributed to pull the benchmark lower. Zhoushan's LSMGO price is at a premium of $20/mt over Singapore's LSMGO and at a discount of $108/mt to Fujairah's LSMGO.

Prompt availability remains under pressure across all grades in Zhoushan, with recommended lead times of around eight days, unchanged from last week.

In Western Australia, both Kwinana and Fremantle ports offer good supplies of VLSFO and LSMGO, with recommended lead times of 7-8 days. Moving to New South Wales, LSMGO is readily available in Sydney, while HSFO availability is subject to enquiry. In Victoria, Melbourne has ample stocks of VLSFO and LSMGO, alongside ample VLSFO supply available in Geelong. However, prompt HSFO supply can be tight in both ports.

In Queensland, both Brisbane and Gladstone ports boast sufficient stocks of VLSFO and LSMGO, with suggested lead times of 7-8 days. HSFO availability remains limited in Brisbane.

In New Zealand's Kiwi ports of Tauranga and Auckland, LSMGO availability is good, and VLSFO supply is also ample in Auckland.

Brent

The front-month ICE Brent contract shed $0.26/bbl on the day, to trade at $88.69/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Concerns about global supply disruptions due to lingering geopolitical tensions and recurring missile attacks on commercial ships in the Red Sea have supported Brent’s price in recent weeks.

In the latest series of missile attacks, Iran-aligned Houthi forces targeted US Navy’s guided missile destroyers USS Laboon and USS Philippine Sea patrolling the Red Sea yesterday, according to the US Central Command (CENTCOM).

Oil market analysts have highlighted earlier that Iran’s involvement in these attacks can prompt Washington to enforce stricter sanctions on Iranian oil and push Brent’s prices higher.

“US President Joe Biden is under pressure to increase efforts to crack down on crude exports from Iran,” commented ANZ Bank’s senior commodity strategist Daniel Hynes.

Downward pressure:

The latest round of ceasefire talks between the Israeli Defense Forces (IDF) and Hamas militants in Cairo, Egypt, has been somewhat constructive, analysts said. This news has put some downward pressure on Brent futures.

“Israel has significantly softened its stance on the conditions for a ceasefire and hostage deal with Hamas, prompting hope for a breakthrough,” VANDA Insight’s founder and analyst Vandana Hari said.

US Secretary of State Antony Blinken has also ramped up efforts to “secure a truce,” Hynes said.

Oil market participants have now shifted their focus on the upcoming US Federal Reserve’s (Fed) two-day policy meeting that will commence later today. The US central bank’s Federal Open Market Committee (FOMC) will discuss the timeline for interest rate cuts this year.

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

“The US economy still consistently growing just below trend growth could force [Fed chairman Jerome] Powell to make a hawkish pivot,” Saxo Bank’s strategy team wrote in a note.

By Tuhin Roy and Aparupa Mazumder

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