ENGINE reports the current changes:
- VLSFO prices up in Singapore and Fujairah ($15/mt), and Zhoushan ($9/mt)
- LSMGO prices up in Singapore ($21/mt) and Zhoushan ($18/mt), and unchanged in Fujairah
- HSFO prices up in Zhoushan ($10/mt), and Fujairah and Singapore ($7/mt)
- Most bunker benchmarks in East of Suez ports have gained in the past day, tracking Brent’s upward movement. Singapore and Fujairah’s VLSFO prices have both risen by $15/mt – higher than the other major regional bunkering hub of Zhoushan. Three higher-priced VLSFO stems fixed in Singapore and two stem fixed in Fujairah, have supported the benchmarks’ upthrust.
Singapore’s LSMGO price has also gained $21/mt – steepest among three major Asian bunker hubs. Three VLSFO stems fixed in a wide range of $24/mt aided the benchmark’s rise.
Despite Singapore’s steep LSMGO price rise, its LSMGO discounts to Zhoushan and Fujairah stand at $23/mt and $5/mt, respectively.
Availability remains tight for VLSFO and HSFO in Singapore, as it has been in recent weeks. Some suppliers are recommending lead times of 9-12 days and 8-9 days, respectively. LSMGO remains readily available in the port, with prompt dates available.
A source says low bunker demand has somewhat kept tightness in check in Zhoushan, with most suppliers advising lead times of 3-5 days across all grades -slightly down from 4-7 days last week.
Several Indian ports, including Kandla on the northwest coast and Cochin and Chennai on the southern coast, have good availability of VLSFO and LSMGO, with short lead times of 2-3 days.
Rough weather conditions are forecast in the Indian ports of Kandla, Sikka and Mumbai over the weekend, which could impact bunker deliveries at these ports.
Brent
The front-month ICE Brent contract has gained $1.50/bbl on the day, to trade at $94.05/bbl at 17.00 SGT (09.00 GMT).
Upward pressure:
Recent economic data from China has supported Brent futures.
The oil market turned positive about China’s economic health after the country's National Bureau of Statistics reported a better-than-expected retail sales growth and industrial output in August, reported Reuters.
Any sign of economic rebound in China would suggest strong demand growth in the world’s largest crude oil importing nation, thereby helping oil prices to move up.
Moreover, the collective 1.3 million b/d output reduction pledged by Saudi Arabia and Russia earlier this month also kept Brent futures above the $90/bbl mark.
Downward pressure:
Meanwhile, the broader OPEC+ output cuts are creating distortions within the oil market, especially with a deficit in medium sour crude grade, argued ING’s head of commodities strategy Warren Patterson.
After the recent surge in oil prices, oil traders are expected to trade cautiously as “[Brent] futures are approaching overbought territory,” said Innes.