VLSFO prices in East of Suez ports have been rangebound, and prompt availability of all grades remains tight in the UAE ports of Fujairah and Khor Fakkan.

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

• VLSFO prices up in Fujairah ($3/mt), Zhoushan ($2/mt) and Singapore ($1/mt)
• LSMGO prices up in Singapore ($5/mt) and Zhoushan ($3/mt), and down in Fujairah ($7/mt)
• HSFO prices up in Singapore ($3/mt) and Zhoushan ($2/mt), and down in Fujairah ($1/mt)

VLSFO benchmarks in East of Suez ports have remained steady over the past day. Singapore’s VLSFO premiums over Zhoushan and Fujairah are $8/mt and $6/mt, respectively.

Lead times for VLSFO have fluctuated significantly in Singapore, with most suppliers now advising up to 12 days, although some can accommodate stems within six days. This reflects a tightening in supply compared to the previous week, when lead times were 4-9 days.

HSFO supply has also tightened in the port, with lead times increasing from 4-7 days last week to 9-13 days now. Lead times for LSMGO vary widely, ranging from 2-9 days.

Fujairah’s LSMGO price has dipped slightly in the past day, while prices in Singapore and Zhoushan have been relatively stable. A lower-priced LSMGO stem fixed in Fujairah contributed to pull the benchmark down. Despite Fujairah’s LSMGO price dip, its premiums over Singapore and Zhoushan are $74/mt and $42/mt, respectively.

In Fujairah, despite low bunker demand, availability of all grades remains limited, with most suppliers requiring lead times of 5-7 days, similar to last week. A similar situation exists in the UAE port of Khor Fakkan, where suppliers are also recommending lead times of 5-7 days.

Brent

The front-month ICE Brent contract moved $0.39/bbl higher on the day, to trade at $87.33/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent crude futures moved higher as supply disruption concerns continued to influence market sentiments.

An Israeli airstrike in southern Lebanon on Wednesday killed a senior member of the Iran-aligned Hezbollah militia, an official from the group told the Associated Press (AP). This news has heightened tension in the Middle East and has put an upward pressure on oil prices.

Brent’s price gained “amid escalating tensions in the Middle East after Israel killed a senior Hezbollah commander, prompting retaliation near the border,” analysts from Saxo Bank said.

Russia’s two biggest oil producers, Rosneft and Lukoil, will cut oil exports from the Black Sea port of Novorossiisk in July, according to a Reuters report. This has also supported Brent’s price gains today.

On the demand side, the US Energy Information Administration (EIA) reported a massive draw of 12.16 million bbls in the US commercial crude oil inventories in the week ending 28 June. This draw has supported the market’s demand growth expectations and was “far exceeding” the expected 680,000 bbl-drop in US crude stocks, Saxo Bank’s analysts said.

Downward pressure:

Brent’s price experienced some downward pressure as the threats related to US oil supply disruptions from the approaching Hurricane Beryl faded, according to analysts.

The latest data from the US Bureau of Ocean Energy Management (BOEM) showed that the threats to oil supply disruptions in the Gulf of Mexico are “easing as the storm spares major drilling areas and platforms in US federal waters,” two analysts from ING Bank noted.

Saudi Arabia’s state-owned oil giant Saudi Aramco has cut prices for all crude oil grades to Asia for the second consecutive month, primarily due to weak demand from the Asian markets, Bloomberg reported. This news has capped some of Brent’s price gains today.

“The recent decision of Saudi Aramco to trim oil OSPs (official selling prices) has further weighed on the [oil] prices,” ING Bank’s analysts added.

Source: ENGINE by Tuhin Roy and Aparupa Mazumder