Brent records biggest weekly drop in over a year

Gas loses price advantage again

Singapore LNG's discounts to bio blends narrow

CHART: The dots represent bunker fuel prices adjusted for calorific contents to become VLSFO-equivalents, and with various estimated levels of EU ETS costs in 2024 excluded (Rotterdam) and included (Rotterdam to non-EU port and Rotterdam to EU port). ENGINE, PRIMA Markets, NYMEX

The front-month ICE Brent futures contract has dropped by $5.98/bbl ($44/mt) over the past week, as concerns about supply disruptions in the Middle East eased on renewed hopes of a ceasefire in Gaza.

Brent's fall has put heavy downward pressure on conventional fuel benchmarks over the past week.

Singapore’s VLSFO premium over Rotterdam stands at $44/mt, a $10/mt decline over the past week.

LNG has lost the price advantage it gained last week, and its VLSFO-equivalent price has returned to a premium over LSMGO in both Rotterdam and Singapore.

LNG’s discount to B24-VLSFO UCOME in Singapore has narrowed by $28/mt to $41/mt. Its price discount to Singapore’s B24-LSMGO blend has decreased by $32/mt to $65/mt.

VLSFO

Rotterdam's VLSFO price has fallen by $14/mt over the past week, a more modest decline than Brent. While VLSFO supply has improved slightly, securing prompt stems still remains a challenge. According to a trader, demand for bunker fuel has also picked up. This has helped support the benchmark.

Singapore's VLSFO has seen a larger decline of $24/mt. Consistently tight supply of the grade in the port has prevented a steeper drop.

Biofuels

Rotterdam's B24-LSMGO HBE price has dropped by $42/mt in the past week, which was three times the $14/mt decline in the B24-VLSFO HBE price.

The more pronounced drop in the B30-LSMGO HBE price has been driven by a sharper $44/mt decline in the underlying ENGINE conventional LSMGO price. 

Singapore’s B24-VLSFO UCOME has shed $27/mt in the past week, while its B24-LSMGO UCOME price has tumbled by $41/mt.

These declines have been driven by a $24/mt fall in the underlying ENGINE conventional VLSFO price and a $41/mt drop in the LSMGO price. Adding to the downward pressure, the China UCOME FOB price also dropped by $20/mt, exerting additional pressure on both benchmarks.

LNG

Rotterdam’s LNG bunker has dropped by $10/mt in the past week. Strong LNG import activity in northwest Europe and reduced gas demand across the continent has exerted downward pressure on benchmark.

On the other side of the world, rising concerns over potential gas supply constraints in Asia have pushed Singapore's LNG bunker price up by $1/mt in the past week.

By Konica Bhatt

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