East of Suez Market Update 23 Feb

Prices in East of Suez ports have moved down, and VLSFO and LSMGO availability is good across several Taiwanese ports.

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 down in Zhoushan ($10/mt), Singapore and Fujairah ($4/mt)
• LSMGO prices down in Zhoushan, Fujairah ($15/mt) and Singapore ($5/mt)
• HSFO prices down in Fujairah ($13/mt), Singapore ($9/mt) and Zhoushan ($2/mt)
• B30-VLSFO prices down in Fujairah ($5/mt) and Singapore ($2/mt)

VLSFO prices across the three major Asian bunker ports have fallen by $4–10/mt over the weekend. Zhoushan’s VLSFO is currently trading at a premium of $13/mt over Fujairah and $9/mt over Singapore.

Bunkering demand in Zhoushan remains muted due to the Chinese New Year holiday from 15–23 February, as several suppliers have suspended operations. Only previously confirmed stems are being delivered. From tomorrow, most suppliers are expected to resume quoting lead times across all grades, according to a source.

Over the past two weeks, suppliers have generally advised lead times of around 7–10 days for all grades in the port.

In Taiwan, lead times for VLSFO and LSMGO remain largely unchanged. Deliveries at Keelung and Hualien require approximately two days’ advance notice, while slightly longer lead times of around three days continue to be recommended at Kaohsiung and Taichung.

Brent

The front-month ICE Brent contract has declined by $0.36/bbl on the day from Friday, to trade at $71.08/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent has found some support after official data from Baker Hughes showed that the US oil rig count was unchanged at 409 in the week ending 20 February.

The rig tally is widely regarded as a forward-looking gauge of US crude output, offering insight into current and anticipated drilling activity in the shale patch.

In a market where supply remains constrained, indications of softer future production can lend upward support to Brent futures.

Downward pressure:

Brent crude’s price has moved lower as market participants focused on renewed possibilities of a negotiation between Washington and Tehran.

The US and Iran are preparing for another round of discussion about the latter’s nuclear enrichment capabilities, Reuters reported. Representatives from both nations will sit for a third round of nuclear talks on Thursday in Geneva, the report added.

“Oil prices are under pressure… with further US-Iran talks scheduled,” according to two analysts from ING Bank.

The news has eased some fears of supply disruption in the oil-rich region, according to market analysts. 

“[Oil] prices are trading softer… with further talks between the US and Iran planned for Thursday, while Iran’s foreign minister said that there is a chance for a diplomatic solution,” ING Bank’s analysts added.

By Tuhin Roy and Aparupa Mazumder

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