Prices in East of Suez ports have moved up, and availability remains good in the Sri Lankan ports of Colombo and Trincomalee.

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

• VLSFO prices up in Fujairah and Zhoushan ($13/mt), and Singapore ($8/mt)
• LSMGO prices up in Fujairah ($24/mt), Zhoushan ($18/mt) and Singapore ($16/mt)
• HSFO prices up in Singapore ($12/mt), Fujairah ($8/mt) and Zhoushan ($7/mt)

Bunker benchmarks in East of Suez ports have mirrored Brent’s rise, showing gains over the past day. Fujairah and Zhoushan VLSFO prices have climbed by $13/mt, while Singapore’s price has gone up by $8/mt. The VLSFO discount in Zhoushan compared to Singapore is $16/mt, and it is nearly at parity with Fujairah.

Suppliers in Zhoushan suggest a lead time of around 5-7 days for all grades, which is nearly unchanged from last week.

In southern South Korea, the availability of VLSFO and LSMGO has tightened, with lead times extending to 7-11 days, compared to 3-7 days last week. HSFO remains limited, with lead times of around 11 days. On the other hand, fuel grades in western South Korean ports require slightly shorter lead times of about seven days.

Sri Lankan ports, including Colombo and Trincomalee, have good availability across all grades, with Colombo having a recommended lead time of around four days. Hambantota port has ample LSMGO availability, though VLSFO supply remains tight.

Brent

The front-month ICE Brent contract has gained $1.79/bbl on the day, to trade at $79.97/bbl at 17.00 SGT (09.00 GMT).

Upward pressure:

Brent crude’s price gained on signs of steady economic growth in the US.

The US Department of Commerce revised its gross domestic product (GDP) estimates upward, a key indicator of demand growth and consumer spending activity, for the second quarter.

The US GDP increased at an annualised rate of 3% in the second quarter of this year, up from the initial estimate of 2.8%, the commerce department’s Bureau of Economic Analysis (BEA) said. The increase primarily reflected growth in consumer spending, prompting market analysts to speculate a growth in crude oil demand in the world’s largest oil-consuming nation.

“Crude oil prices rallied as robust US economic data eased concerns about weaker demand,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

Disruption to Libya’s oil production has escalated this week, adding further upward pressure on Brent’s price. Almost half of the OPEC country’s crude output, or about 700,000 b/d, was offline yesterday and exports from multiple ports were suspended, Reuters reported.

The dispute in Libya revolves around the control of its central bank, the only globally recognised depository of its oil revenues. “Oil exports from five eastern ports were suspended while the country’s output dipped further amid a battle to gain control of the central bank,” Hynes added.

Downward pressure:

Concerns over weakness in Chinese oil demand have continued to cap some of Brent’s price gains this week.

Oil consumption in China, the world’s second largest consumer dropped by 8% year-on-year to 13.55 million b/d in July, China’s General Administration of Customs (GACC) reported. This has raised concerns about the economic health of the country.

The oil market seems to be “sensitive” to bearish news from China, Hynes remarked.

Source: ENGINE by Tuhin Roy and Aparupa Mazumder