Bunker prices have mostly dipped with Brent in Europe and Africa, and rough weather could disrupt Gibraltar Strait bunkering for several days from today.
Changes on the day to 08.00 GMT today:
- VLSFO prices up in Rotterdam ($4/mt) and Gibraltar ($1/mt), and down in Durban ($5/mt)
- LSMGO prices down in Gibraltar and Durban ($7/mt) and Rotterdam ($6/mt)
- HSFO prices down in Rotterdam and Gibraltar ($4/mt)
VLSFO is expected to be tight for prompt dates off Skaw and in Gothenburg until the end of the month, sources say. Lower regional refinery production has capped resupply this month. Longer lead times are recommended.
Skaw and Gothenburg’s VLSFO prices remain elevated compared to other northern European ports. Hamburg, Amsterdam and Antwerp price the grade $15-17/mt lower.
Rotterdam’s VLSFO benchmark has drawn support from a higher-priced prompt stem and resisted Brent’s downward pull. Its discount to Skaw and Gothenburg has narrowed to $7/mt.
Some congestion has built in Gibraltar today. Five vessels have been waiting to bunker with three suppliers, port agent MH Bland says.
Gibraltar Strait ports brace for strong eastern winds and swells from this afternoon and into the weekend. Bunker deliveries in the Bay of Gibraltar, including Algeciras’ Delta anchorage, could be affected, MH Bland says.
Brent
Front-month ICE Brent has come down by $0.66/bbl on the day, to $82.08/bbl at 08.00 GMT.
Brent has lacked direction while the market ponders whether US President Biden will release crude from the country’s Strategic Petroleum Reserves (SPR) to rein in the recent price rally, according to ING commodity strategists Warren Patterson and Wenyu Yao.
“The hesitation appears to be because the market outlook is more comfortable in 2022, while an SPR release would also only offer short-term relief to the market,” they added.
But if emergency US crude is released, it might not make much of an impact on domestic US fuel prices.
“It seems the energy market is convinced that even if the US resorts to tapping the strategic petroleum reserve, the benefits would be minimal and yield little benefit to the US consumer,” says OANDA analyst Ed Moya.
The American Petroleum Institute (API) reported a big 2.79 million-bbl gasoline stock draw in the week to 12 November. Depleting gasoline inventories could add pressure on US prices and strengthen the argument for an SPR release.
US crude inventories grew by 655,000 bbls and undershot expectations of a 1.55 million-bbl build, according to a poll of analysts by Oilprice.com.
Official Energy Information Administration (EIA) data is due for release at 15.30 GMT today, and could give Brent more direction.