East of Suez Market Update 24 Sep

Prices in East of Suez ports have surged across all grades, and VLSFO availability remains tight in Zhoushan.

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

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

• VLSFO prices up in Zhoushan ($58/mt), Fujairah ($56/mt) and Singapore ($52/mt)
• LSMGO prices up in Zhoushan ($130/mt), Fujairah ($95/mt) and Singapore ($89/mt)
• HSFO prices up in Zhoushan ($50/mt), Singapore ($40/mt) and Fujairah ($32/mt)

Zhoushan's VLSFO price has climbed by $58/mt, the steepest increase among the three major Asian bunker ports. The benchmark now stands at a $52/mt premium over Singapore and an $86/mt discount to Fujairah.

Zhoushan's LSMGO price has risen even more sharply, by $130/mt, the largest single-day rise for the grade in the port since early April. This has pushed its premium over Singapore from $133/mt to $174/mt, while it now trades at a $221/mt discount to Fujairah. Zhoushan's HSFO price has gained $50/mt, widening its premium over Singapore to $79/mt and over Fujairah to $81/mt.

VLSFO supply remains tight in Zhoushan, where lead times are holding at about 10 days, the same as last week. Several suppliers are running low on stocks, and delayed replenishment cargoes are restricting availability, according to a source. LSMGO and HSFO availability has improved, with lead times for both grades shortening to around seven days, compared with 10 days earlier.

Indonesian ports continue to offer healthy bunker fuel availability. Suppliers in Jakarta, Surabaya, Balikpapan and Cigading are generally advising VLSFO lead times of only 2-3 days.

Brent

The front-month ICE Brent contract has gained by $6.34/bbl on the day, to trade at $105.77/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has reversed course, surpassing the $105/bbl mark, as hopes of a diplomatic breakthrough took a backseat at the United Nations General Assembly summit.

US President Donald Trump threatened Iran with “annihilation” during his speech at the summit, while Iranian President Masoud Pezeshkian retaliated to Trump’s remarks by stating that Tehran will not bow down to the US’ “bullying mentality.”

Oil prices continue to find steady support amid these latest developments, as a swift end to the Middle East conflict remains unlikely, market analysts noted.

Oil prices remain more than 60% higher year-to-date, as ongoing disruption in the Middle East continue to strain the global oil market, two analysts from ING Bank noted.

Downward pressure:

Brent crude’s price has felt some downward pressure after the US Energy Information Administration (EIA) reported a rise in US crude stocks.

Commercial US crude oil inventories increased by around 3 million bbls, to 426.4 million bbls, in the week ending 18 September, according to data from the EIA.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure on Brent's price.

By Tuhin Roy and Aparupa Mazumder

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