East of Suez Market Update 2 Nov

Prices in East of Suez ports have fallen across all grades, and availability of VLSFO and HSFO is tight in Zhoushan.

IMAGE: Aerial view of Zhoushan City, Zhejiang Province. Getty Images

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

• VLSFO prices down in Zhoushan ($61/mt), Fujairah ($34/mt) and Singapore ($22/mt)
• LSMGO prices down in Zhoushan ($99/mt), Singapore ($89/mt) and Fujairah ($70/mt)
• HSFO prices down in Zhoushan ($73/mt), Singapore ($45/mt) and Fujairah ($27/mt)
• B30-VLSFO price down in Singapore ($78/mt)

Zhoushan’s VLSFO price has fallen by $61/mt, the steepest decline among the three major Asian bunker ports. The price now stands at a $42/mt discount to Singapore and an $18/mt discount to Fujairah.

Zhoushan’s Hi5 spread has widened from $82/mt to $94/mt, as the port's HSFO fell by more than its VLSFO, but remains below Singapore’s spread at $119/mt, and Fujairah’s, at $219/mt.

Zhoushan’s monthly average VLSFO price jumped from $506/mt in February to $925/mt in March, dipped to $714/mt in June and has risen every month since, reaching $947/mt in October, the highest since July 2022.

The HSFO monthly average climbed from $550/mt in July to $883/mt in October, its highest since November 2021 and above the previous peak of $790/mt in March.

LSMGO averaged $1,408/mt in October, little changed from September's $1,405/mt.

VLSFO and HSFO availability is tight in Zhoushan despite low demand, with lead times for both grades rising to 15 days, from 12 days last week. Low stocks and adverse weather have constrained supply, and customs formalities have also delayed supply schedules, a source said.

LSMGO availability in Zhoushan is good, with lead times down to two days, from four days last week.

Brent

The front-month ICE Brent contract has lost by $7.66/bbl on the day from Friday, to trade at $108.88/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has found some support from concerns that the oil market has little room left to absorb another supply shock.

The market has adapted to eight months of Middle East disruption, but its ability to absorb another shock “has diminished,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Persian Gulf exports remain constrained, tanker availability is tight and global distillate inventories sit around 5% below their five-year average, Hynes added.

Besides, US President Donald Trump has also repeatedly threatened to restart strikes on Iran after the US midterm elections, scheduled for tomorrow, leaving more room for supply disruptions.

“The oil market is likely to remain nervous this week ahead of the US midterm elections,” two analysts from ING Bank noted.

Downward pressure:

Brent’s price has come under pressure on hopes of progress in talks to end the war between Iran, and the US and Israel.

Iranian negotiators left talks with Qatari mediators in Doha yesterday, but not because of difficulties in the negotiations, Reuters reported, citing an official briefed on the meeting.

“It remains to be seen whether this [diplomacy] will lead to anything,” ING Bank’s analysts said.

The front-month ICE Brent contract has changed from December to January, which goes a long way to explain today’s drop in price.

Brent's December contract was trading around $117/bbl on Friday. However, the January contract opened near $111/bbl today, accounting for much of the roughly $7/bbl decline. 

By Tuhin Roy and Aparupa Mazumder

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