European and African bunker prices have soared to multi-year and all-time highs, and this week’s cyber attack has crippled bunker loading capacity in Antwerp.
Changes on the day to 09.00 GMT today:
· VLSFO prices up in Durban ($49/mt), Gibraltar ($46/mt) and Rotterdam ($25/mt)
· LSMGO prices up in Durban ($56/mt), Gibraltar ($36/mt) and Rotterdam ($27/mt)
· HSFO prices up in Gibraltar ($22/mt) and Rotterdam ($15/mt)
Bunker prices have soared across the region. Rotterdam’s VLSFO price hits a new all-time high of nearly $700/mt.
Bunker fuel oil supply remains tight in ARA with few suppliers facing issues due to terminal hackings, sources say. Recommended lead times have gone up to 4-5 days for VLSFO and LSMGO grades.
A cyber attack hit oil terminals in Antwerp and surrounding ports this week, capping bunker loadings to around 50% of capacity and creating loading issues for several bunker suppliers, sources say.
Some barges have resorted to load bunkers at unaffected terminals further away in Rotterdam and other ARA locations unaffected by the hack, extending loading times.
Meanwhile, German bunker markets have largely recovered from a separate cyber attack on oil terminals last weekend. LSMGO and VLSFO availability remains good in Hamburg, with lead times of 3-5 days.
HSFO380 gains in Gibraltar were slightly restrained in past days thus widening Gibraltar Hi5 spread by $24/mt to $170/mt. Recommended lead times are around 4-6 days across all grades in the Gibraltar Strait.
There is minimal congestion in Gibraltar this morning, with three vessels waiting to bunker, while 10 vessels are queued up to bunker across Algeciras’ inner and outer anchorages. One supplier is running 8-12 hours behind schedule in Algeciras, says port agent MH Bland.
Brent
Front-month ICE Brent has surged $3.28/bbl higher on the day, to $92.36/bbl at 09.00 GMT today.
The benchmark oil price has rallied in response to global supply constraints and by the geopolitical tensions in Ukraine and the UAE.
The US warned yesterday of potential use of a propaganda video showing a staged attack by Russia as a pretext to invade Ukraine, Reuters reports.
Earlier, the UAE intercepted three drones in its airspace. This is the fourth attack on the UAE in recent weeks, and the second invasion of its air space within this week.
A massive winter storm has swept through parts of the US, bringing heavy ice and snow and posing a challenge to mobility, according to Reuters.
“The oil market is too tight and vulnerable to any shock. Even as thousands of flights are cancelled, the energy market is fixated over production and not so much short-term demand shocks,” says OANDA analyst Ed Moya.
However, Citi Research analysts predict an oil surplus in the second quarter of this year, which may sustain for 15-18 months and lead to a 20% fall in the December Brent futures contract, Reuters reports.
Next week, attention will be on the US Energy Information Administration’s short term energy outlook due on 8 February, and the monthly oil market reports to be released by the International Energy Agency (11 February) and OPEC (10 February).