European and African bunker prices have slumped with Brent amid signals of more US supply to the market.
Changes on the day to 08.00 GMT today:
- VLSFO prices down in Durban ($33/mt), Rotterdam ($25/mt) and Gibraltar ($20/mt)
- LSMGO prices down in Gibraltar ($28/mt), Durban ($25/mt) and Rotterdam ($23/mt)
- HSFO prices down in Rotterdam ($19/mt) and Gibraltar ($18/mt)
Bunker prices have come down considerably since reaching yearly highs three weeks ago. Rotterdam’s VLSFO price has dropped by $50/mt, or 8%, since 18 October. That was twice the 4% drop for Brent over the same period.
The port’s LSMGO price has held up relatively better, only shedding $37/mt, or 5%, and being propped up by strong pre-winter heating oil demand. HSFO380 has taken the biggest fall of $54/mt, or 11%.
There is light congestion in Gibraltar this morning, with three vessels waiting to be supplied by three different suppliers. One supplier is running 4-6 hours behind schedule, port agent MH Bland says.
Brent
Front-month ICE Brent has slumped $2.26/bbl lower on the day and more than erased the previous session’s gains. At 08.00 GMT it stood at $82.75/bbl.
Brent is down under pressure from rising US crude inventories. Commercial crude stocks rose by 1 million bbls to a three-month high of 435.10 million bbls on 5 November, official Energy Information Administration (EIA) figures showed yesterday.
Stocks grew despite higher refinery utilisation, and largely as a result of a 3.15 million-bbl release from its Strategic Petroleum Reserves (SPR). These reserves are usually tapped to feed the commercial market during emergency production outages, like after Hurricane Ida earlier this year.
The Biden administration had warned it would resort to “tools” to cool the recent oil price rally and make fuels more affordable to consumers. Major oil consuming countries like the US, Japan and India had been increasingly vocal towards OPEC+, urging the group to pump more in the lead-up to its monthly meeting last week.
The White House has yet to announce a large release from its SPR to ease price pressure, but the possibility of it happening has contributed to put a lid on prices.
“It seems unlikely crude prices can break above recent highs until energy traders see whatever action will come from the Biden administration,” OANDA analyst Edward Moya said.