Global Market Update 31 Dec

Bunker benchmarks across major global ports have mostly fallen in the past day, while fuel availability remains normal in Houston.

IMAGE: Aerial view of Houston Ship Channel. Port of Houston

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Houston ($29/mt), Singapore ($6/mt), Gibraltar ($5/mt), Rotterdam and Zhoushan ($3/mt)
• LSMGO prices unchanged in Rotterdam, and down in Houston ($20/mt), Gibraltar, Zhoushan ($8/mt) and Singapore ($4/mt)
• HSFO prices up in Rotterdam ($9/mt), and down in Singapore ($8/mt), Houston ($6/mt), Gibraltar ($4/mt) and Zhoushan ($3/mt)
• B30-VLSFO at a $264/mt premium over VLSFO in Singapore
• B30-VLSFO at a $294/mt premium over VLSFO in Fujairah
• B30-VLSFO at a $361/mt premium over VLSFO in Gibraltar

Fuel prices have plunged in Houston in the past day. The port’s VLSFO price has declined by $29/mt, likely influenced by a lower-priced stem of more than 1,500 mt fixed at $418/mt, which has put downward pressure on the benchmark.

The Gulf Coast port’s LSMGO price has also fallen after a lower-priced 50–150 mt LSMGO stem was fixed at $600/mt.

Demand at the port remains normal, with suppliers recommending lead times of around 3–7 days for all three conventional grades.

LSMGO price off Malta has slumped almost $30/mt in a single day. A lower-priced 50-150 mt stem fixed there has contributed to drag the benchmark down.

Consequently, the LSMGO price off Malta is now at a $17/mt discount to Gibraltar, compared to a thin $5/mt discount seen on Tuesday.

Off Malta, some suppliers can deliver LSMGO at the earliest by 5–6 January, while VLSFO supply remains tight and only one supplier is currently offering HSFO, a trader told ENGINE. ULSFO supply remains normal, the trader added.

Rough south-westerly winds of more than 25 knots and waves of over 1.5 metres are forecast off Malta between 2-3 January, which could disrupt deliveries in some bunkering areas.

Despite sluggish bunker demand, suppliers in Singapore are recommending lead times of about 4–6 days for VLSFO. LSMGO availability remains comfortable, with shorter lead times of around three days, while HSFO supply is tight and requires much longer advance notice of 9–10 days.

At Port Klang, VLSFO and LSMGO remain easy to secure—especially for smaller prompt stems—but HSFO availability continues to be limited.

Brent

The front-month ICE Brent contract has dropped by $0.90/bbl on the day, to trade at $61.14/bbl at 09.00 GMT.

Upward pressure:

Brent crude has found some support following remarks by US President Donald Trump, which heightened geopolitical risk premiums overnight.

After a meeting with Israeli counterpart Benjamin Netanyahu, Trump said the US had struck a dock along Venezuela’s coast that he claimed was used by vessels involved in drug trafficking, according to media reports.

Trump further added that the US could launch strikes on Iran if the Islamic Republic resumed producing nuclear weapons.

“I've been reading that they're building up weapons and other things, and if they are, they're not using the sites we obliterated, but possibly different sites,” Reuters quoted Trump as saying. 

Elsewhere, Saudi Arabia-led forces struck the southern Yemeni port of Mukalla yesterday, Reuters reported. The airstrike targeted a UAE-linked weapons shipment, marking a significant escalation between the two OPEC producers.

Oil market participants are “stuck weighing geopolitical risk from Venezuela, Russia, and Yemen,” SPI Asset Management managing partner Stephen Innes remarked.

Downward pressure:

Brent’s price has come under downward pressure after the American Petroleum Institute (API) reported a surge in US crude stocks.

US crude oil inventories increased by 1.7 million bbls in the week ending 26 December, according to the API estimates.

Earlier this week, the US Energy Information Administration (EIA) reported a 400,000 bbls increase in US crude stocks, to around 425 million bbls for the week ending 19 December.

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

Brent’s price gains were “erased by sizable inventory builds,” Innes said. “For now, barrels matter more than headlines,” he added.

The EIA will put out this week’s official figures later today.

By Gautamee Hazarika, Nachiket Tekawade, Tuhin Roy and Aparupa Mazumder

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