Prices in East of Suez ports have moved in mixed directions, and bunker deliveries across several Chinese and Taiwanese ports remain suspended due to Typhoon Gaemi.

PHOTO: Illuminated Kaohsiung city and harbor at night, Taiwan. Getty Images

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

• VLSFO prices unchanged in Zhoushan, and down in Fujairah ($3/mt) and Singapore ($2/mt)
• LSMGO prices up in Zhoushan ($15/mt) and Singapore ($4/mt), and unchanged in Fujairah
• HSFO prices up in Fujairah ($1/mt), and down in Singapore ($8/mt) and Zhoushan ($2/mt)

VLSFO benchmarks in East of Suez ports have remained largely steady over the past day. Singapore’s VLSFO premiums over Fujairah and Zhoushan are $11/mt and $9/mt, respectively.

Zhoushan’s LSMGO price has surged by $15/mt in the past day, supported by a higher-priced LSMGO stem fixed in the port. Zhoushan’s LSMGO premium over Singapore is $59/mt, and its discount to Fujairah is $13/mt.

VLSFO and LSMGO grades are readily available in Zhoushan, with suppliers recommending lead times of 5-7 days. HSFO availability has improved, with lead times decreasing from 7-10 days last week, to 5-7 days now.

However, bunker deliveries in Zhoushan have been suspended since Monday due to rough weather caused by Typhoon Gaemi. Most suppliers expect bunkering to resume on Monday, when calmer weather is forecast.

Bunker deliveries in Taiwanese ports have been halted since yesterday due to Typhoon Gaemi. Bunkering operations at major ports including Hualien, Kaohsiung, Taichung and Keelung are expected to resume tomorrow. However, bad weather conditions are likely to extend lead times to about four days, a trader says.

Taipei, Mai-Liao, and An-Ping ports have suspended all operations since 24 July, according to GAC Hot Port News.

Bunkering in Shanghai has also been suspended, with most suppliers not offering deliveries before Tuesday. Shanghai has a good supply of VLSFO and LSMGO, but HSFO remains scarce.

Brent

The front-month ICE Brent contract moved $0.76/bbl lower on the day, to trade at $80.87/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent’s price found support after the US Energy Information Administration (EIA) reported a drop in crude stocks. Commercial crude oil inventories in the US dropped by 3.74 million bbls to 436 million bbls in the week ending 19 July, the EIA reported.

The drawdown in stockpiles reported by the EIA “was the fourth straight decline and brings total stockpiles down to the lowest level since February,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

The OPEC Secretariat has received compensation plans from Russia, Iraq, and Kazakhstan for producing crude oil above their allocated production quotas in the first six months of 2024. This news has provided some support for prices.

The combined overproduction from the three countries totalled 2.28 million b/d between January and June 2024. During this period, Iraq exceeded its crude production quota by 1.18 million b/d, Kazakhstan by 620,000 b/d, and Russia by 480,000 b/d, according to OPEC.

The countries will make up for the excess supply in full over the next 15 months, ending in September 2025, the Vienna-headquartered group said.

Brent also found upward support from “a drop in US crude inventories and Russia's pledge for additional production cuts,” analysts from Saxo Bank noted.

Downward pressure:

Hopes for an imminent ceasefire agreement between Israel and Hamas have tempered Brent crude oil price gains this week. Israel’s Prime Minister Benjamin Netanyahu delivered an hour-long speech to the US Congress yesterday in which he outlined plans to gradually cease military operations in the Gaza Strip.

To further discuss the current situation in Gaza, Netanyahu will meet with US President Joe Biden today. He is also scheduled to meet with former US President Donald Trump in Florida tomorrow.

Brent’s price is expected to drop further if the US, Qatar and Egypt successfully crack a ceasefire deal, putting oil supply disruption concerns from the region out of the picture.

Signs of an economic slowdown in China have raised concerns about demand growth in the country. According to recent figures, China's GDP growth dropped from 5.3% in the first quarter to 4.7% in the second quarter.

By Tuhin Roy and Aparupa Mazumder

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