East of Suez Market Update 22 June

Bunker fuel prices in East of Suez ports have moved in mixed directions, and 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 from Friday:

• VLSFO prices up in Singapore ($44/mt), Zhoushan ($35/mt), and down in Fujairah ($147/mt)
• LSMGO prices up in Zhoushan ($26/mt), and down in Singapore ($44/mt), Fujairah ($34/mt)
• HSFO prices down in Singapore ($23/mt), Fujairah ($22/mt) and Zhoushan ($7/mt)
• B30-VLSFO price up in Singapore ($18/mt)

Singapore’s VLSFO price has risen sharply over the weekend. The port's benchmark is currently at a premium of $11/mt over Zhoushan, while at a discount of $364/mt to Fujairah.

Meanwhile, Singapore’s HSFO price has declined, widening the port's Hi5 spread to $239/mt from $172/mt.

VLSFO supply in Singapore remains tight, with suppliers advising lead times of 8-14 days. HSFO availability has improved marginally, with lead times shortening to 5-12 days from 10-15 days previously. LSMGO supply has tightened, with recommended lead times extending from around seven days last week to 9-14 days now.

In Malaysia’s Port Klang, VLSFO availability is steady. LSMGO and HSFO remain difficult to secure due to tight supply.

Brent

The front-month ICE Brent contract has dropped by $0.20/bbl on the day from Friday, to trade at $79.29/bbl, at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has felt some upward pressure amid weekend reports of renewed hostilities, casting doubt on the US-Iran peace accord.

The Israel Defense Forces (IDF) struck targets in southern Lebanon over the weekend, breaching a key provision of the peace deal signed in France last week.

“Oil prices have moved higher this morning as the US-Iran ceasefire gets off to a rocky start,” two analysts from ING Bank noted.

Shortly after the IDF strikes, Tehran announced it had again closed the Strait of Hormuz to commercial vessels as Israel continued to attack Lebanon.

“For energy markets, the key factor is still whether oil and LNG flows from the Persian Gulf continue to recover, despite all the rhetoric,” the analysts said.

Downward pressure:

Talks between high-ranking officials from Washington and Tehran went well in Switzerland earlier today, according to reports.

Both countries have agreed to finalising a peace deal within the next 60 days that will end hostilities in Lebanon and reopen the Strait of Hormuz to commercial vessel traffic.

The talks, initially scheduled for Friday, were delayed until Sunday. It took place shortly after Israel launched drones on targets in Southern Lebanon.

“The US-Iran deal marks an inflection point for oil markets,” ANZ Bank’s senior commodity strategist Daniel Hynes noted. “Crude oil prices are expected to remain under pressure as supply through the Strait of Hormuz recovers,” he added.

By Aparupa Mazumder

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