Bunker prices have reached two-month highs in Rotterdam and Gibraltar, and a bout of rough weather could disrupt bunkering off Skaw.
Changes on the day to 08.00 GMT today:
- VLSFO prices up in Durban ($10/mt), Rotterdam and Gibraltar ($9/mt)
- LSMGO prices up in Durban ($13/mt), Gibraltar ($12/mt) and Rotterdam ($7/mt)
- HSFO prices up in Rotterdam ($5/mt) and Gibraltar ($4/mt)
Rotterdam and Gibraltar’s VLSFO prices have surged to their highest levels since July, partly helped up by shut in production in the US Gulf and rallying Brent values this week.
Availability all fuel grades has been steady in ARA and Gibraltar Strait ports in recent months, without any major supply disruptions.
Congestion is minimal in Gibraltar, with two vessels waiting to bunker this morning. One of the vessels awaits ship-to-ship delivery, the other is lined up to be supplied by an occupied barge. The barge’s supplier is running 2-3 hours behind schedule, port agent MH Bland says.
High winds and swell could disrupt bunkering and delay deliveries off Skaw for the next two days. Skaw and the nearby port of Gothenburg currently price VLSFO at competitive levels to Rotterdam and Antwerp, while their LSMGO prices are $27-41/mt higher than the two ARA ports.
Bunkering is expected to go ahead amid calmer weather at the Algoa Bay anchorage today. Bunkering was suspended because of strong winds on Tuesday and yesterday. A backlog of bunker deliveries could be cleared before another bout of rough weather is forecast in the bay from tomorrow.
Brent
Front-month ICE Brent crude has risen by $1.17/bbl in the past day, to $75.47/bbl at 08.00 GMT.
The futures contract has hit fresh seven-week highs, coming up with support from diminishing US crude inventories and more optimistic outlooks for oil demand next year.
Hurricane Ida knocked most offshore crude oil production in the Gulf of Mexico offline when it struck over two weeks ago. With less crude coming onshore, US crude oil stockpiles have been drawn down to 417.45 million bbls – a two-year low.
A 6.42 million bbl draw last week was preceded by a 1.53 million bbl draw the previous week, and inventories already came from four straight weeks of draws.
With resupply lines under pressure, ExxonMobil’s 520,000 b/d Baton Rouge refinery has twice had to ask the US Strategic Petroleum Reserves (SPR) to lend it 1.5 million bbls of crude to keep refinery production levels up amid robust fuel demand.
Just under 30% of offshore production in the Gulf remained offline yesterday, the Bureau of Safety and Environmental Enforcement has estimated.
The impact from tropical storm Nicholas has been much less severe after it hit two weeks after Hurricane Ida. Colonial Pipelines quickly restored key oil pipelines it had shut as a precaution ahead of Nicholas. Electricity was quickly back online for the hundreds of thousands of people in the Houston area who lost power immediately after Nicholas hit. Major Texan ports, refineries and terminals in Nicholas path were mostly unscathed by the storm’s winds, heavy rains and water elevation.
The International Energy Agency (IEA) now expects continuous progress on Covid-19 vaccine making and rollouts, and less social distancing, to prop up oil demand by further in the fourth quarter of this year, and next year. It revised its global oil demand forecast for 2022 up by 100,000 b/d to 99.4 million b/d.
IEA’s more optimistic demand outlook followed an upward revision from OPEC earlier this week. OPEC upped its global demand outlook by 870,000 b/d to a pre-pandemic level of 100.8 million b/d.