World News
'Fair Value' for Brent Crude at $65-70/bl After Iran Ceasefire: GRM
The bunker market should expect a significant drop in its underlying crude prices after a ceasefire between Iran and Israel, according to hedging firm GRM.
US President Donald Trump announced a ceasefire between Iran and Israel late on Monday, bringing an end to 12 days of conflict between the two countries.
ICE Brent crude futures sank sharply on Monday, closing down by $5.53/bl from Friday's level at $71.48/bl, before dropping further on Tuesday morning.
A range of $65-70/bl now appears likely in the near term with the geopolitical risk premium fading, GRM said in an emailed note on Tuesday.
"Talk of a Hormuz Strait closure and broader war risk has completely faded for now," the company said in the note.
"The market has already priced out much of the war-related risk premium built in over the past 12 days.
"We believe a small premium remains.
"A fair value for Brent likely sits in the USD 65–70 range.
"A soft dollar and strong risk appetite are supporting oil prices this morning; however, the overall bias remains to the downside today.
"We also expect cracks in diesel, gasoil and HSFO to decline."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 570.50 | 0.00 | 715.50 | 13.50 |
| Rotterdam | 532.00 | 4.50 | 739.00 | 3.00 |
| Houston | 546.50 | 8.50 | 740.00 | 27.00 |
| Fujairah | 560.00 | 1.00 | 777.00 | 10.00 |
| Global 20 Ports Average | 588.00 | 1.00 | 805.00 | 13.00 |
| Global 4 Ports Average | 552.00 | 1.00 | 743.00 | 13.00 |
| Global Average Bunker Price | 619.00 | 2.50 | 835.50 | 3.00 |
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