Prices in East of Suez ports have moved down, and VLSFO and LSMGO availability remains good across several Chinese ports.

PHOTO: An ocean-going freighter berth at port of Ningbo. Getty Images

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

• VLSFO prices down in Zhoushan ($7/mt), Singapore ($2/mt) and Fujairah ($1/mt)
• LSMGO prices down in Zhoushan ($8/mt), Singapore ($7/mt) and Fujairah ($1/mt)
• HSFO prices down in Singapore, Fujairah and Zhoushan ($5/mt)

Zhoushan’s VLSFO price has dropped in the past day, while the grade's price in Singapore and Fujairah remained broadly steady. Despite Zhoushan’s VLSFO price decline, it stands at near parity levels with both Singapore and Fujairah.

LSMGO prices have come down in Zhoushan and Singapore, while it moved in a tight range in Fujairah in the past day. Zhoushan’s LSMGO price currently stands at a premium of $35/mt over Singapore and at a discount of $69/mt to Fujairah.

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

In northern China, Dalian port has ample supply of VLSFO and LSMGO. Both grades are also easily available in Qingdao and Tianjin. However, HSFO supply is tight in both ports. In Shanghai, availability of VLSFO and LSMGO has improved, while HSFO is still under pressure. In Fuzhou and Yangpu, both VLSFO and LSMGO grades are readily available. However, in Guangzhou, prompt delivery dates for low-sulphur fuel grades are limited. VLSFO availability is tight in Xiamen, while LSMGO supply is normal there.

All bunker grades are available in Hong Kong, typically with lead times of seven days. However, adverse weather conditions are forecast to hit the port tomorrow, potentially impacting bunkering operations.

Brent

The front-month ICE Brent contract lost $0.99/bbl on the day, to trade at $84.18/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Supply-related concerns have provided some support to Brent’s prices this week, with Ukraine ramping up drone attacks on Russian energy facilities.

On Wednesday, a Ukrainian drone struck the state-owned oil refiner Rosneft's refinery in Ryazan, western Russia, resulting in a fire, Bloomberg reported. The crude processing unit in Ryazan had only recently resumed operations following a prior strike.

The Ryazan refinery, with an annual oil processing capacity of 17.1 million mt, is one of the biggest refineries in Russia. The refinery has been regularly targeted by Ukrainian drones in recent months.

OPEC’s total oil production fell slightly by 100,000 b/d to 26.49 million b/d in April, according to a Reuters survey. This decline in production can be attributed to reduced exports from Iran, Iraq and Nigeria, as well as the ongoing voluntary production cuts by certain members within the broader OPEC+ alliance.

Downward pressure:

Brent futures extended recent losses amid signs of weaker demand after the US Federal Reserve maintained interest rates at 5.25-5.50% after its two-day policy meeting concluded yesterday. This decision marks the sixth consecutive meeting where the central bank has opted to keep interest rates unchanged.

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

“Renewed jitters in the broader financial markets as US Federal Reserve chairman Jerome Powell confirmed expectations of higher-for-longer interest rates after the central bank’s two-day policy meeting on Wednesday also weighed on crude,” VANDA Insights' founder and analyst Vandana Hari said.

The US Energy Information Administration (EIA) reported a huge build in US crude stocks, supporting the “bearish” demand narrative. Commercial crude oil inventories in the US rose by 7.27 million bbls to 461 million bbls in the week ended 26 April – to its highest level since June 2023.

“Bearish inventory data from the Energy Information Administration (EIA) put further pressure on the [oil] market,” two analysts from ING Bank said.

By Tuhin Roy and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online