Prices in East of Suez ports have come down, and prompt bunker fuel availability remains tight in the UAE ports of Fujairah and Khor Fakkan.

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

• VLSFO prices down in Singapore ($17/mt), Zhoushan ($16/mt) and Fujairah ($5/mt)
• LSMGO prices down in Zhoushan ($8/mt), Fujairah ($7/mt) and Singapore ($4/mt)
• HSFO prices down in Singapore ($9/mt), Fujairah ($6/m) and Zhoushan ($5/mt)

Fujairah’s VLSFO price has remained stable in the past day, while prices in Singapore and Zhoushan have fallen sharply by $16-17/mt. A higher-priced VLSFO stem in Fujairah has helped its benchmark to resist the general market trend, eliminating its VLSFO discount to Singapore and reducing the discount to Zhoushan by more than half, to $7/mt now.

Fujairah continues to price its LSMGO higher than both Singapore and Zhoushan, with its LSMGO premiums over Singapore and Zhoushan at $158/mt and $92/mt, respectively.

Prompt availability in Fujairah remains very tight, with most suppliers recommending lead times of 7-10 days for all bunker fuel grades, though some can still provide prompt deliveries. Khor Fakkan faces similar conditions, with suggested lead times of 7-10 days.

Meanwhile, Omani ports such as Sohar, Salalah, Muscat, and Duqm have ample LSMGO supplies with prompt delivery dates available.

Brent

The front-month ICE Brent contract has declined by $0.68/bbl on the day, to trade at $70.45/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent crude’s price found slight support after the American Petroleum Institute (API) reported another drop in US crude stocks, easing some demand growth worries.

Crude oil inventories in the US dropped by about 2.8 million bbls in the week that ended 6 September, according to API estimates. A drop in US crude stocks can support oil demand growth and put upward pressure on Brent’s price.

On the supply front, the US Energy Information Administration (EIA) forecasts a continued decline in global oil inventories this year, citing production outages in Libya and OPEC’s decision to extend output cuts for an additional two months.

Global oil inventories are projected to fall by 900,000 b/d in the third quarter of 2024, with a further decline exceeding 1 million b/d expected through the first quarter of 2025, as the market adjusts to the extension of OPEC+ supply cuts, the EIA said in its September short-term energy outlook (STEO) report.

This news has added some upward pressure on Brent’s price. “More oil will be taken out of inventories in the fourth quarter of 2024 that [than] we previously expected because OPEC+ announced that they will delay production increases until December,” the EIA said.

The US energy agency expects Brent’s price to push back above $80/bbl by the end of this year.

Downward pressure:

Brent’s price is lingering close to $70/bbl as a slowdown in demand growth in top oil consumers continued to outweigh supply tightness fears.

China imported 11.56 million b/d of crude oil last month, down from 12.43 million b/d imported in August 2023, market intelligence provider JLC reported citing data from the General Administration of Customs (GACC).

The sharp drop in China's crude imports signals a slowdown in the country’s oil demand growth, according to oil market analysts. “The real story here is China’s persistently weak demand—a red flag for the rest of the global economy,” SPI Asset Management’s managing partner Stephen Innes remarked.

Brent fell further after global oil producers’ group OPEC slashed its demand growth forecast to 2.03 million b/d in September from 2.11 million b/d reported in its previous monthly oil market report (MOMR).

Brent’s price has slumped due to “intensifying demand worries, firmly pushing aside any supply worries,” VANDA Insights’ founder and analyst Vandana Hari said.

By Tuhin Roy and Aparupa Mazumder

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