Most prices in East of Suez ports have moved down, and VLSFO and HSFO availability continues to remain constrained in Singapore.

PHOTO: Aerial view of Singapore container terminal. Getty Images

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

• VLSFO prices up in Singapore ($9/mt), and down in Fujairah ($16/mt) and Zhoushan ($5/mt)
• LSMGO prices down in Fujairah ($11/mt), Singapore ($4/mt) and Zhoushan ($1/mt)
• HSFO prices up in Singapore ($16/mt), and down in Fujairah ($12/mt) and Zhoushan ($10/mt)

The price of VLSFO in Singapore has increased by $9/mt in the past day, while prices in Fujairah and Zhoushan have decreased. The benchmark’s rise has been driven by a higher-priced VLSFO stem fixed on the day. As a result, Singapore’s VLSFO premiums over Fujairah and Zhoushan have widened by $25/mt and $14/mt, reaching $45/mt and $22/mt, respectively.

Singapore’s HSFO price has risen more sharply than its VLSFO price, reducing the port’s Hi5 spread from $165/mt yesterday to $158/mt. This spread is now wider than Fujairah’s $152/mt spread and Zhoushan’s $146/mt spread.

VLSFO availability in Singapore has become more constrained, with several suppliers now recommending lead times of up to two weeks. Some suppliers can accommodate stems in as little as six days, but these stems are usually priced higher, a source said.

HSFO supply is also under pressure, with lead times advised at 11-14 days. Lead times for LSMGO vary considerably, ranging from 5-10 days.

In Malaysia’s Port Klang, VLSFO and LSMGO supplies are robust, with some suppliers offering prompt deliveries for smaller quantities, but HSFO availability remains limited.

Brent

The front-month ICE Brent contract moved $1.16/bbl higher on the day, to trade at $81.05/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent’s price surpassed $80/bbl on the back of intensifying supply concerns from different parts of the world.

On Sunday, Iran-aligned Hezbollah armed group launched over 150 drones and missiles toward Israel, the Israel Defense Forces (IDF) said. This news subsided hopes of a US-mediated ceasefire deal in the Gaza Strip and added upward pressure on Brent’s price this week.

“Markets remain on edge as skirmishes between Israel and Hezbollah intensify,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Supply disruption concerns have also intensified in eastern Europe, with Russia and Ukraine now specifically targeting energy facilities in the bordering areas.

Brent’s price gained more support following reports that key oilfields in eastern Libya were shut down due to growing unrest over control of the country’s central bank, Reuters reported. However, Libya’s state-owned oil company National Oil Corporation (NOC), which oversees the country’s oil resources, has yet to confirm the shutdown.

“The risk of disruption to actual barrels of oil became real after Libya’s eastern government said it will halt all oil production and exports,” Hynes added.

Downward pressure:

A decline in China’s demand growth in recent weeks has continued to put downward pressure on Brent’s price this week.

Oil consumption in the world’s second-largest consumer dropped by 8% year-on-year to 13.55 million b/d, China’s General Administration of Customs (GACC) reported.

In the US, worries about economic growth emerged following the country’s employment report by the US Bureau of Labor Statistics (BLS). US employers added 818,000 fewer jobs in the 12 months leading up to March 2024 than initially estimated. This news has capped some of Brent’s price gains.

A slowdown in the US economy could have a cascading impact on oil demand growth, according to market analysts. Traders are now waiting for tomorrow’s release of official US oil inventory data to gain more clarity about the country’s oil demand growth.

Source: ENGINE by Tuhin Roy and Aparupa Mazumder