Bunker prices are rising on Brent and tightening availability across several global ports as suppliers increasingly look towards delivery dates in early January.
Changes on the day to 08.00 GMT today:
· VLSFO prices up in Rotterdam and Houston ($16/mt), Fujairah ($8/mt), Singapore and Gibraltar ($7/mt)
· LSMGO prices up in Rotterdam ($38/mt), Singapore ($9/mt), Gibraltar and Houston ($7/mt) and Fujairah ($3/mt)
· HSFO380 prices up in Singapore ($8/mt), Houston ($7/mt) and Fujairah ($5/mt), and down in Rotterdam ($5/mt)
VLSFO availability has tightened further in Singapore, pushing the earliest delivery dates to 15-17 days ahead now. Bunker schedules have come under relentless pressure from pre-holiday bookings, and combined with previous barge loading delays to keep availability tight.
Limited availability and strong demand have supported Singapore’s VLSFO prices against other ports. Its premiums over Fujairah and Zhoushan have risen to $14-16/mt.
Singapore’s recommended lead time for LSMGO is shorter at 5-7 days out, while around 10-12 days ahead are still advised for HSFO380 stems.
HSFO380 availability tightened in Fujairah this week, with lead times of up to 12 days. Tight availability may linger into January owing to delayed arrival of blend stocks and lower production for cargo. Recommended lead times for VLSFO and LSMGO have been extended to nine days out.
Backlogged bunker deliveries keep being cleared in Gibraltar amid calm weather conditions. Five vessels are in line to bunker this morning, down from seven yesterday and a high of 34 vessels on Monday, port agent MH Bland says.
Suppliers in the Gibraltar Strait brace for potential weather disruptions between tomorrow and Monday.
Gibraltar Strait bunker prices drew extra support from tighter availability as a result of the recent weather suspensions and backlogs, and remain elevated against ARA ports.
But Gibraltar’s VLSFO price has come down from a premium of $41/mt to $32/mt over Rotterdam in the past day, and its LSMGO price from $79/mt to $47/mt.
Rotterdam’s LSMGO price has gained considerably this week, and jumped to a $95/mt premium over its VLSFO price in the past day. Some ARA suppliers have tight prompt availability of LSMGO and require around 3-5 days of lead time, while others can deliver more prompt.
ARA’s independently held gasoil stocks – which include heating oil, diesel and gasoil – slumped to their lowest level since 2014 last week, before regaining 2% of volume this week, according to Insights Global data.
Availability of all fuel grades is limited for deliveries in the Houston area and offshore in the Gulf of Mexico for the remaining days of the year. VLSFO offer and fixing levels vary greatly between suppliers in Houston, with the higher end of the range lifting the port’s benchmark in the past day.
Brent
Front-month ICE Brent has climbed $1.14/bbl higher, extending into a four-day recovery rally, to land at $76.39/bbl at 08.00 GMT today.
The futures contract is heading for a near 4% gain on the week. Omicron concerns linger, but have been paired by research studies showing significantly fewer hospitalisations among Omicron-infected than among Delta-infected people in South Africa and the UK.
Vaccine makers AstraZeneca and Pfizer-BioNTech have said their third booster jabs increase antibody levels and offer protection against Omicron.
“The omicron is not-as-bad-as-we-thought trade continued to push oil markets higher overnight,” OANDA analyst Jeffrey Halley says.
Brent has also found support from Energy Information Administration (EIA) figures showing a bigger-than-expected draw of US crude inventories in the most recent week. Stocks are usually drawn down towards the end of the year for tax purposes.
Market participants will now increasingly zoom in on developments around the upcoming OPEC+ meeting on 4 January. The group will once again decide whether stay on course by phasing back another 400,000 b/d of output in February, as it has done in each month since August.
Some OPEC+ member states have been unable to fill their output quotas in recent months, including Libya, which has been exempt from OPEC+ quotas until its output levels steady. Libya declared a force majeure on exports from two of its terminals earlier this week, after militias forced shut its biggest 300,000 b/d oilfield.