East of Suez Market Update 27 Jan

Prices in East of Suez ports have moved in mixed directions, and availability is tight across all grades in Singapore.

IMAGE: Cargo terminal at the Port of Singapore. Getty Images

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

• VLSFO prices up in Zhoushan ($7/mt), and down in Singapore ($5/mt) and Fujairah ($1/mt)
• LSMGO prices down in Zhoushan ($22/mt), Fujairah ($9/mt) and Singapore ($2/mt)
• HSFO prices up in Singapore ($10/mt), Zhoushan ($5/mt), and down in Fujairah ($1/mt)
• B30-VLSFO prices down in Singapore ($11/mt) and Fujairah ($10/mt)

Zhoushan’s VLSFO price has climbed by $7/mt over the past day, while prices in both Singapore and Fujairah have edged lower. As a result, Zhoushan’s VLSFO premiums now stand at $41/mt over Fujairah and $24/mt over Singapore, up from $33/mt and $12/mt, respectively.

In Singapore, VLSFO price has slipped by $5/mt, while the port’s HSFO price has risen by $10/mt since the previous session, narrowing the Hi5 spread by $15/mt to $60/mt. This remains narrower than the Hi5 spreads in Fujairah at $69/mt and Zhoushan at $61/mt.

On the supply side, Singapore’s VLSFO availability has tightened further due to terminal loading delays for several suppliers, with recommended lead times of 12–14 days. HSFO supply continues to be constrained, typically requiring 9–12 days of advance notice, broadly in line with last week’s 8–12 days. LSMGO supply has also tightened significantly, with lead times increasing to 7–9 days from 2–5 days last week.

At Port Klang, both VLSFO and LSMGO remain generally well supplied, particularly for smaller prompt stems, while HSFO availability remains tight and more difficult to secure.

Brent

The front-month ICE Brent contract has declined by $0.85/bbl on the day, to trade at $65.27/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude has felt some upward pressure as harsh winter weather in the US has disrupted production across major crude-producing regions.

US crude oil output has fallen by as much as 250,000 b/d due to severe weather conditions, Reuters reported.

“A winter storm in the US is likely to spur increased heating demand amid snow, ice and freezing temperatures,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Harsh weather conditions are also “raising concerns about disruptions to energy supply,” with US refineries struggling to operate in full force, according to Hynes.

Downward pressure:

Brent’s price has moved lower following news that the Chevron-led consortium operating Kazakhstan’s Tengiz oilfield has resumed production after last week’s fire.

The fire that damaged a power generation and distribution facility on 18 January forced a temporary shutdown of the oilfield. 

The oilfield is operated by a consortium led by US-headquartered Chevron, which holds a 50% stake, alongside ExxonMobil with 25%, Kazakhstan’s state oil company KazMunayGaz with 20%, and Russia’s Lukoil with 5%.

The oilfield “accounts for most of Kazakhstan’s exports,” Hynes added.

By Tuhin Roy and Aparupa Mazumder

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