East of Suez Market Update 11 May

Most bunker benchmarks in East of Suez ports have followed Brent’s upward movement, while availability across all grades is tight in Zhoushan.

IMAGE: Aerial view of Zhoushan, Zhejiang, China. Getty Images

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

• VLSFO prices up in Zhoushan ($20/mt), Singapore ($2/mt), and down in Fujairah ($6/mt)
• LSMGO prices up in Zhoushan ($64/mt), Fujairah and Singapore ($6/mt)
• HSFO prices up in Zhoushan ($50/mt), Singapore ($16/mt) and Fujairah ($6/mt)
• B30-VLSFO price up in Singapore ($10/mt)

Zhoushan’s HSFO price has risen more sharply than its VLSFO price, narrowing the port’s Hi5 spread from $119/mt to $89/mt.

At $89/mt, Zhoushan’s Hi5 spread remains below Fujairah’s $188/mt and Singapore’s $112/mt.

Zhoushan’s LSMGO price has recorded a $64/mt rise – highest among the three major Asian bunker hubs. Despite the rise, the port’s LSMGO price is at a discount of $200/mt to Fujairah.

Prompt bunker fuel supply in Zhoushan is tight across all fuel grades, with expected lead times of 5-7 days.

In northern China, Dalian and Qingdao are well supplied with VLSFO and LSMGO, although HSFO is tight in Qingdao. In southern ports, availability of both VLSFO and LSMGO is tight in Fuzhou, while VLSFO supply is adequate in Xiamen but LSMGO remains constrained.

Brent

The front-month ICE Brent contract has gained by $3.85/bbl on the day from Friday, to trade at $104.15/bbl, at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude has moved closer to $105/bbl mark at the start of this week, as hostilities in the Middle East resurfaced over the weekend – effectively undermining expectations of a US-Iran ceasefire deal.

US President Donald Trump has rejected Iran’s response to a US-drafted ceasefire proposal, stating the response was “totally unacceptable,” without revealing any details of Iran’s reply.

Brent crude’s price “jumped this morning after the US rejected Iran’s latest peace plan proposal,” two analysts from ING Bank noted.

Last week, the US Navy struck three Iran-linked vessels, allegedly trying to transit Iran’s territorial waters – which is currently under a US blockade.

“Oil prices remain highly sensitive to noise around Iran, highlighting the significance of the ongoing supply disruptions in the Persian Gulf,” ING Bank analysts said.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US rose by two to 410 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Aparupa Mazumder

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