Prices in East of Suez ports have tracked Brent’s downturn, and availability of all grades is good in Zhoushan.

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

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

• VLSFO prices down in Fujairah ($10/mt), Singapore ($6/mt) and Zhoushan ($5/mt)
• LSMGO prices down in Zhoushan ($5/mt), Singapore and Fujairah ($1/mt)
• HSFO prices down in Zhoushan ($12/mt), Singapore ($8/mt) and Fujairah ($4/mt)
• B24-VLSFO at a $188/mt premium over VLSFO in Singapore
• B24-VLSFO at a $223/mt premium over VLSFO in Fujairah

VLSFO benchmark prices across the three major Asian bunker ports declined by $5–10/mt over the weekend, with Zhoushan seeing the smallest drop. Currently, Zhoushan’s VLSFO is priced at a premium of $11/mt over Fujairah and is nearly at par with Singapore.

Zhoushan’s HSFO benchmark also declined, falling more sharply than VLSFO and widening the port’s Hi5 spread by $7/mt to $77/mt. This remains lower than the Hi5 spreads in Fujairah at $98/mt and Singapore at $86/mt.

VLSFO availability in Zhoushan remains steady amid subdued demand, with lead times holding at around 5–7 days, similar to last week. For HSFO, most suppliers are now recommending lead times of 4–6 days, slightly shorter than the five days advised last week. LSMGO lead times in Zhoushan have improved, dropping from around five days last week to 2–4 days now.

In Taiwan, lead times of about three days are recommended for both VLSFO and LSMGO at Kaohsiung. Shorter lead times of around two days are sufficient at other major Taiwanese ports, including Hualien, Taichung, and Keelung.

Brent

The front-month ICE Brent contract has lost by $0.53/bbl on the day from Friday, to trade at $67.84/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

The global market’s attention is now shifting from geopolitical tensions in the Middle East to demand growth factors. This has supported Brent crude’s price recently.

The US Federal Reserve (Fed) will hold its upcoming interest rate meeting in July, where officials are largely expected to cut US interest rates in September, according to market analysts.

Lower interest rates in the US can boost demand, making dollar-denominated commodities like oil cheaper for holders of other currencies.

“The [oil] market is punch drunk on rate cut euphoria. Futures are fully loaded for a September cut and even pricing a 20% chance for July,” SPI Asset Management managing partner Stephen Innes remarked.

Downward pressure:

Oil’s brief rally has lost momentum as supply glut concerns have overshadowed optimism about demand growth.

The eight OPEC+ members currently unwinding supply cuts are expected to raise their combined output in August by another 411,000 b/d, Reuters reports. This news has put downward pressure on Brent.

“What’s really spooking the tape now is OPEC+ playing offense,” Innes remarked.

The Saudi Arabia-led group will again meet on 6 July to decide August production levels, the group said earlier.

“Rumours are swirling that the cartel is eyeing another 411,000 bpd hike for August, which would make it four straight months of aggressive taps-turning,” Innes added.

By Tuhin Roy and Aparupa Mazumder

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