Prices in East of Suez ports have tracked Brent’s downward trend, and VLSFO availability is tight in Singapore.

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

• VLSFO prices down in Singapore ($20/mt), Fujairah ($17/mt) and Zhoushan ($12/mt)
• LSMGO prices down in Zhoushan ($24/mt), Fujairah ($22/mt) and Singapore ($16/mt)
• HSFO prices down in Zhoushan ($15/mt), Fujairah ($13/mt) and Singapore ($12/mt)
• B24-VLSFO at a $198/mt premium over VLSFO in Singapore
• B24-VLSFO at a $203/mt premium over VLSFO in Fujairah

VLSFO benchmarks across the three major Asian bunker ports have dropped by $12–20/mt over the past day, with Singapore seeing the steepest decline. A lower-priced 150–500 mt VLSFO stem fixed in Singapore has contributed to the downward pressure on its benchmark. Currently, Singapore’s VLSFO is priced at a marginal premium of $6/mt over Fujairah and at a slight discount of $6/mt to Zhoushan.

The drop in Singapore’s VLSFO price has outpaced the decline in its HSFO price, narrowing the port’s Hi5 spread by $4/mt to $68/mt.

VLSFO lead times in Singapore have increased from 6–13 days last week, to 9–14 days now. LSMGO lead times have also risen from 3–7 days to 5–9 days, while HSFO lead times remain stable at around 5–9 days.

At Malaysia’s Port Klang, both VLSFO and LSMGO remain readily available, with prompt deliveries possible for smaller quantities. However, HSFO supply continues to be tight.

Brent

The front-month ICE Brent contract has declined by $2.08/bbl on the day, to trade at $64.12/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent has found support as supply concerns in the Middle East resurfaced after a CNN report stated that Israel was preparing for a major airstrike on Iranian nuclear facilities.

The risk of a wider conflict in the Middle East could affect oil supplies from other regional producers.

“Crude oil rallied in early trading amid heightened geopolitical risk,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.

The news has raised concerns that negotiations between the US and Iran over Tehran's nuclear program may falter, according to market analysts.

“While the likelihood of a strike appears low, it has snapped the market out of a calm that developed as some hostilities in the region appeared to cool slightly,” Hynes said.

Downward pressure:

Brent’s price has declined after the US Energy Information Administration (EIA) reported a surprise gain in US crude stocks.

Commercial US crude oil inventories increased by 1.3 million bbls to touch 443 million bbls for the week ending 16 May, according to data from the EIA.

The build in crude stocks was “was much higher than expected,” Hynes said. A buildup in inventories typically signals weaker oil demand, which can put downward pressure on Brent's price.

By Tuhin Roy and Aparupa Mazumder

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