Global bunker prices have mixed direction as Brent values steady after big fluctuations at the start of the week.
Changes on the day to 08.00 GMT today:
- VLSFO prices up in Gibraltar and Houston ($6/mt), and down in Singapore ($13/mt), Fujairah ($7/mt) and Rotterdam ($4/mt)
- LSMGO prices up in Gibraltar ($7/mt), Singapore ($6/mt) and Rotterdam ($4/mt), and down in Fujairah ($13/mt) and Houston ($2/mt)
- HSFO380 prices up in Singapore ($8/mt), Rotterdam ($4/mt) and Houston ($3/mt), and down in Gibraltar ($13/mt) and Fujairah ($12/mt)
Four vessels are waiting to bunker in Gibraltar this morning as barges are completing other deliveries, port agent MH Bland says. Congestion has increased as two suppliers are delayed by 2-6 hours in Gibraltar and Algeciras, and another supplier by around half a day.
Gibraltar’s VLSFO price continues to gain against Rotterdam, more than doubling its premium over the past day, to $18/mt now. The Mediterranean bunkering hub typically prices the grade $15-25/mt higher than Rotterdam, but has priced it at competitive levels in recent week, and occasionally slightly below Rotterdam.
The spread between the two ports’ HSFO380 prices has gone the other way, more than halving to $12/mt today.
HSFO380 has been particularly tight in Fujairah after a supplier exited the market last month, leaving only three other suppliers still carrying the grade. Tighter supply pushed Fujairah’s recommended lead times to 12 days last week, and spiked its price to premiums of $39/mt over Zhoushan and $53/mt over Singapore on 6 August.
In signs of the tightness easing now, Fujairah’s lead time have shortened to 10 days, while its price has dipped below Zhoushan’s and narrowed its premium over Singapore to $33/mt.
VLSFO and LSMGO have also become more readily available in Fujairah, with lead times one day shorter than last week, at six days now.
VLSFO prices have dropped below $500/mt in several northern European ports over the past day. Rotterdam and Antwerp currently price the grade $1-2/mt higher than Skaw, Gothenburg and Hamburg. Supply of all grades remains steady across the ports.
Houston’s HSFO380 premiums over Balboa and New York have narrowed to $8-9/mt. The Gulf Coast port’s price rose above several other ports in the Americas when supply tightened towards the end of July. Availability has improved in Houston, but some of the price premiums remain.
Brent
Front-month ICE Brent added $0.57/bbl on the day, to $79.83/bbl at 08.00 GMT.
The futures contract reached intraday highs of more than $71/bbl earlier today, supported by indicative weekly draws US crude oil and gasoline stocks released by the American Petroleum Institute (API) yesterday. Crude stocks fell by 816,000 bbls and gasoline stocks by 1.1 million bbls – a sign of robust demand.
API figures are often an indicator of crude and oil product stock levels published a day ahead of the official US Energy Information Administration (EIA) stocks data. Traders await the EIA report release today at 14.30 GMT for more signals of US fuel demand and price direction.
The EIA has revised its US fuel demand forecast up for 2021, based on stronger-than-expected demand growth between May and July. Gasoline demand was buoyed by higher employment and mobility as the economy bounced back from its peak Covid-19 wave in January.
As the Delta variant rips through parts of China, prompting authorities to cancel flights and restrict mobility in major Chinese cities, near-term oil demand will take a hit, according to Goldman Sachs. The bank has cut its forecast for Chinese oil demand by 1 million b/d over the next two months, partly basing the timeline on the time it took India to recover from its destructive wave of the Delta variant.
India’s new daily Covid-cases peaked in early May, and by July its gasoline demand had recovered to pre-pandemic levels.