Low sulphur bunker prices have ticked up across Europe and Africa, and suppliers continue to clear backlogs after weather disruptions in the Gibraltar Strait.
Changes on the day to 08.00 GMT today:
- VLSFO prices up in Durban ($11/mt), Rotterdam and Gibraltar ($6/mt)
- LSMGO prices up in Rotterdam ($10/mt), Durban ($9/mt) and Gibraltar ($6/mt)
- HSFO prices up in Rotterdam ($2/mt), and steady in Gibraltar and Durban
VLSFO remains tight for prompt dates off Skaw and has kept its price premiums over Rotterdam at around $30/mt, and over Hamburg at $8/mt. When supply is steady, the ports are typically within $5/mt of each other. Resupply is expected off Skaw at the end of the month and could ease pressure to bring Skaw’s price for the grade back in line with regional prices.
Congestion has increased in Gibraltar with seven vessels queued up to bunker this morning. Suppliers had all but cleared their weather disruption backlogs by yesterday morning. The line of vessels that has formed in the past day is mostly to bunker with one supplier, port agent MH Bland says.
There is also slight bunker congestion remaining at anchorages in Algeciras, after rough weather at the end of last week created a backlog across Gibraltar Strait ports. Suppliers in Ceuta are delayed by up to half a day.
Gibraltar’s bunker prices remain elevated against Rotterdam, with premiums of $46/mt for VLSFO and $92/mt for LSMGO.
Durban’s VLSFO price has gained on a higher-priced stem and narrowed its discount to Port Elizabeth.
Suppliers at the Algoa Bay anchorage by Port Elizabeth, where most stems are delivered, are up against periods of high swells and possible disruptions this week.
Brent
After a sharp drop at the beginning of the week, front-month ICE Brent crude has recovered by $0.51/bbl on the day, to $79.27/bbl at 08.00 GMT.
The US is about to announce a crude release from its Strategic Petroleum Reserves (SPR), a White House told Reuters. Runaway gasoline prices and inflation has weighed on President Biden’s polling rates and prompted an outcry from Democrats.
The Biden administration has drummed up support from Japan and India for a coordinated release of strategic reserves. China is also looking to release some of its reserves.
A sizeable, combined release could trigger OPEC+ to delay its monthly incremental 400,000 b/d output increases, OPEC+ delegates have told S&P Global Platts. The group has phased back its historic 10 million b/d oil cuts from last year with apprehension of possible Covid-19 infection spikes.
Last week, OPEC secretary general Mohammad Barkindo said global supply-demand balance will tilt into a surplus next month and doubled down on a cautious approach with OPEC+ supply restraint.
“OPEC+ is pushing back on this coordinated effort which is being led by the US to thwart surging energy costs as the global economic recovery stumbles to runaway inflation fears,” says OANDA analyst Ed Moya.