Bunker prices have recovered some of their heavy losses in the previous session, and prices have surged in South African ports affected by civil unrest disruptions this week.
Changes on the day to 08.00 GMT today:
VLSFO prices up in Durban ($20/mt), Rotterdam ($9/mt) and Gibraltar ($6/mt)
LSMGO prices up in Durban ($22/mt), Gibraltar ($9/mt) and Rotterdam ($7/mt)
HSFO prices up in Rotterdam ($7/mt), and down in Gibraltar ($12/mt)
Port operations in Durban and Richards Bay have begun to normalise with workers returning to the ports today.
Rail, road and public transport links to the ports were severed when civil unrest escalated into mass violence and looting in South Africa’s KwaZulu-Natal, where the two ports are situated.
The Port of Richards Bay was forced to shut on Monday and operations at Durban have been severely restricted. Trucks can now access Richards Bay again and the port has cleared all shipping backlogs, South African state-owned transport and infrastructure firm Transnet said in a statement today.
Terminal operations in Durban have also improved, and marine services like bunkering have been going ahead throughout the disruptions, Transnet said.
VLSFO and LSMGO prices have surged by $19-22/mt in Richards Bay and Durban in the past day. The gains have been almost twice as large as in Port Elizabeth, where port operations have not been directly disrupted by protests and violence.
Gibraltar’s VLSFO and LSMGO prices slumped by more than $30/mt in the previous session, and have only partly recovered those losses in the past day. Under pressure from several lower-priced stems today, its VLSFO price has dipped below most other prices in Europe, and to a $6/mt discount to Rotterdam.
There are minimal delays in Gibraltar this morning, with only one vessel waiting for a bunker barge to become ready. Certain suppliers are 2-6 hours behind schedule in Ceuta and Algeciras.
Delays persist in Las Palmas following a period of high swell and disrupted outer anchorage bunkering, which adds pressure on the port’s more limited inner anchorage bunkering capacity.
Strong winds and swell are forecast off Malta from today and over the weekend, and strong winds in the Gibraltar Strait on Sunday and Monday.
Brent
ICE Brent September futures have slipped by $0.26/bbl on the day, to $73.41/bbl at 08.00 GMT.
Brent is on track for a weekly decline of nearly 3% amid the prospect of more OPEC+ oil in the market, signs of a dip in US fuel demand and rising Covid-19 cases in Europe and Asia.
A breakthrough in the impasse between Saudi Arabia and the UAE this week is expected to bring more oil to the market. OPEC+ negotiations stranded earlier this month when the UAE rejected the group’s output plan unless its baseline production level would be updated from October 2018.
Other OPEC+ members had voted in favour of easing production cuts by 2 million b/d in increments between August and December, and extend their output management pact from April next year to the end of that year.
The UAE is thought to have been given a concession for a baseline update to get behind the group’s output plan.
“More importantly to markets, though, is whether it will lead to a flurry of demands from other members for similar concessions, leading to the spectre of much higher volumes of oil hitting global markets as growth start to slow in parts of the world,” OANDA market analyst Jeffrey Halley said in a research note today.
Growing US gasoline and distillate stocks has also weighed on Brent this week. Figures from the US Energy Information Administration (EIA) showed builds of 1 million bbls for gasoline and 3.7 million bbls for distillate fuels in the week ending 9 July, pointing to lower road and industrial fuel demand. Investors looked beyond another big crude stock draw to focus on a dip in refinery utilisation and weaker fuel demand.