European and African bunker prices have come further down with Brent after a sizeable US crude inventory build.
Changes on the day to 08.00 GMT today:
- VLSFO prices down in Durban ($12/mt), Gibraltar ($11/mt) and Rotterdam ($10/mt)
- LSMGO prices down in Durban ($15/mt), Gibraltar ($14/mt) and Rotterdam ($6/mt)
- HSFO prices steady in Durban, and down in Gibraltar ($15/mt) and Rotterdam ($8/mt)
Bunker fuel oils have been in tighter supply in Rotterdam in recent days. Availability of HSFO380 looks to be improving with more suppliers able to accommodate deliveries on prompt dates now. The port’s VLSFO price has found support in more limited availability and is currently at $8-9/mt premiums over Skaw and Gothenburg.
There is minimal congestion in Gibraltar today, with only one vessel in line to bunker at berth, port agent MH Bland says. Gibraltar Strait ports could see an uptick in demand while bunkering remains suspended by bad weather off Malta. At least one vessel has been diverted to Gibraltar because of the suspensions.
Bunkering was called off in all of Malta’s offshore bunkering areas yesterday, following partial weather suspensions earlier in the week. The latest forecast has calmer weather in store for Malta from Saturday.
Conversely, the weather is set to worsen in the Gibraltar Strait from Saturday and could affect deliveries over the weekend.
Durban’s low sulphur bunker fuel prices have fallen sharply on the day, to widen its discounts to Algoa Bay, where high swells and wind could threaten bunker deliveries until Saturday. Durban has VLSFO at a $35/mt discount to Port Elizabeth and Algoa Bay, and LSMGO at a $55/mt discount.
However, in contrast to Durban, anchorage bunkering at Algoa Bay does not incur port calling costs and could still present a more attractive option, especially when weather conditions are calmer.
Brent
Front-month ICE Brent has fallen by $1.37/bbl on the day to 08.00 GMT, when it stood at $83.91/bbl.
Brent has dropped to two-week intraday lows following yesterday’s release of official US crude stocks data showing a bigger-than-expected build of 4.27 million bbls. Analysts polled by Reuters had expected a smaller 1.90 million-bbl build.
In other news, Iran has announced it will return to the negotiating table in November, in an attempt to revive the 2015 nuclear deal.
“We agree to start negotiations before the end of November. Exact date would be announced in the course of the next week,” political deputy of the Ministry of Foreign Affairs of Iran Ali Bagheri tweeted.
A deal could pave the way for a return of Iranian barrels to the market. When Donald Trump pulled out of the nuclear deal to reimpose sanctions in 2018, around 2 million bbls of Iranian crude and condensate was taken out of the market.
“This could provide a segway for the United States to remove sanctions, which have severely throttled Tehran’s ability to sell its oil on global markets,” DailyFX analyst Thomas Westwater commented.