Bunker prices have surged higher in East of Suez ports, and VLSFO supply is tight in Zhoushan.

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

• VLSFO prices up in Zhoushan ($44/mt), Fujairah ($35/mt) and Singapore ($34/mt)
• LSMGO prices up in Singapore ($48/mt), Zhoushan ($47/mt) and Fujairah ($27/mt)
• HSFO prices up in Singapore ($29/mt), Zhoushan ($22/mt) and Fujairah ($11/mt)

Bunker benchmarks in East of Suez ports have been pulled up amid a sharply rising Brent price. Zhoushan's VLSFO price has seen the largest gain among the three major Asian bunker hubs, surging by $44/mt. Zhoushan’s VLSFO premiums over Fujairah and Singapore currently stand at $53/mt and $48/mt, respectively.

Despite normal bunker demand, prompt VLSFO availability remains tight in Singapore and Zhoushan, with suppliers in Singapore facing low stock levels and terminal loading delays. Several suppliers in Singapore now expect lead times of almost 14 days for the grade.

VLSFO and LSMGO availability is good in Malaysia's Port Klang, with some suppliers offering prompt deliveries for smaller parcels. However, HSFO availability remains limited in the port.

Prompt availability of all grades remains tight in the UAE port of Fujairah, with suppliers recommending lead times of 7-10 days.

In Saudi Arabia’s Jeddah port, prompt availability for VLSFO and LSMGO grades is abundant, a supplier said.

Brent

The front-month ICE Brent contract has moved $4.87/bbl higher on the day, to trade at $75.17/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent’s price surpassed $75/bbl on oil supply disruption fears, following reports that Iran launched over 180 ballistic missiles towards Israel on Tuesday.

In a significant escalation of tensions in the Middle East, the Israel Defense Forces (IDF) confirmed that Tehran is now directly involved in the regional conflict, putting the second-largest OPEC producer’s production capabilities under direct threat.

“Crude oil prices surged higher after Iran launched a missile attack on Israel,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

The attack comes in retaliation to Israel’s military actions in Beirut last week, which killed Hezbollah leader Hassan Nasrallah and other prominent leaders of the Iran-aligned militant group.

Meanwhile, Israel has vowed to strike back against yesterday’s attack, sparking further tensions in the wider Middle Eastern region.

“Attention is now fully on how Israel will respond to this latest attack,” two analysts from ING Bank remarked. “The more Iran gets directly involved in this conflict the greater the risk of oil supply disruptions,” they added.

Downward pressure:

Brent’s price gains were marginally capped by concerns about production hikes from the OPEC+ members.

“The [oil] market was spooked by reports that Saudi Arabia is willing to forge ahead with production hikes in December,” Hynes said.

OPEC+ will hold its Joint Ministerial Monitoring Committee (JMMC) meeting later today. The Saudi Arabia-led coalition, which is expected to gradually start unwinding production cuts from 1 December, “is not expected to recommend any changes to production policy,” VANDA Insights’ founder and analyst Vandana Hari said.

Demand growth concerns coming in from China, the world’s second-largest oil consumer, have also put some downward pressure on Brent.

China’s latest economic stimulus measures may not be enough to sustain economic growth in the country, market analysts said.

By Aparupa Mazumder

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