East of Suez Market Update 20 Feb

Prices at East of Suez ports have moved in mixed directions, and HSFO availability is tight in Singapore.

IMAGE: Aerial view of Singapore container terminal. Getty Images

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

• VLSFO prices up in Fujairah ($7/mt), Singapore ($1/mt), and down in Zhoushan ($1/mt)
• LSMGO prices down in Fujairah ($4/mt), Zhoushan ($3/mt) and Singapore ($2/mt)
• HSFO prices up in Fujairah ($2/mt), unchanged in Zhoushan, and down in Singapore ($4/mt)
• B30-VLSFO at $183/mt premium over VLSFO in Singapore
• B30-VLSFO at $281/mt premium over VLSFO in Fujairah

Singapore’s HSFO price has declined over the past day, driven by a lower-priced 500–1500 mt stem fixed at the port. HSFO availability is tight in Singapore, though lead times have narrowed to 8-12 days, from 7-18 days previously.

Meanwhile, Singapore’s LSMGO price has also declined, after a lower-priced 150-500 mt stem was fixed in the port. Singapore’s LSMGO discounts to Fujairah and Zhoushan are currently $84/mt and $27/mt, respectively.

LSMGO typically requires 6-10 days of lead time in Singapore, compared to last week's wider range of 2-10 days.

At Malaysia’s Port Klang, VLSFO and LSMGO are generally well supplied, while HSFO remains tight and comparatively difficult to secure.

Brent

The front-month ICE Brent contract has inched $0.10/bbl lower on the day, to trade at $71.44/bbl, at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has found support after the US Energy Information Administration (EIA) reported a massive drop in crude stocks.

Commercial US crude oil inventories have decreased by 9 million bbls to 420 million bbls for the week ending 13 February, according to data from the EIA.

A drop in US crude stocks usually signals stronger demand and can offer some support to Brent’s price.

The EIA data provided support to Brent’s price “with a bullish release,” two analysts from ING Bank noted.

Meanwhile, recent comments from US President Donald Trump have put some upward pressure on Brent, according to market analysts.

Trump has set a deadline of 10-15 days for Iran to make a deal with Washington over its nuclear program, or "really bad things" will happen, Reuters reported.

“Any outbreak of fighting would jeopardise flows from a region that pumps about a third of the world’s supplies,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

There are no significant downward pressures on Brent’s price momentarily, however, market analysts remain cautious about further developments in the Iran-US nuclear talks.

Earlier this week, representatives from both nations met for negotiations in Geneva, Switzerland.

Washington said that Iran will submit a detailed proposal in the coming two weeks, according to another Reuters report.

By Aparupa Mazumder

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