European and African bunker prices have made sharp increases on the back of a $3/bbl Brent gain, and congestion has eased in Gibraltar.
Changes on the day to 08.00 GMT today:
- VLSFO prices up in Durban ($24/mt), Rotterdam ($23/mt) and Gibraltar ($15/mt)
- LSMGO prices up in Durban ($34/mt), Gibraltar ($16/mt) and Rotterdam ($11/mt)
- HSFO prices up in Rotterdam ($18/mt) and Gibraltar ($17/mt)
Rotterdam’s VLSFO and HSFO380 benchmark prices have gained sharply with support from higher priced stems fixed in the past day.
Skaw and Gothenburg’s VLSFO values have come down by $5/mt relative to Rotterdam, now pricing the grade at $25/mt premiums.
Prompt supply of VLSFO has been tight in the Scandinavian bunker locations. Resupply is expected to improve availability towards the end of the month. Gale-force winds and waves pushing 4 metres off Skaw on Friday and Saturday morning could push deliveries into the often more sheltered Gothenburg Roads or into port in Skagen or Gothenburg – for suppliers that have those options.
Yesterday’s build-up in bunker congestion has been cleared in Gibraltar, while delays persist at Ceuta’s anchorages. Suppliers are running 15-20 hours behind schedule in Ceuta, port agent MH Bland says.
No immediate delays are expected in Las Palmas, but rising swells from Friday and into next week could disrupt outer anchorage bunkering in the port.
Gibraltar Strait ports face strong winds on Saturday. Gale-force winds and tall waves could trigger bunker suspensions off Malta between Saturday and next Tuesday.
Brent
Front-month ICE Brent crude has leaped $3.34/bbl higher on the day, to $82.61/bbl at 08.00 GMT.
The futures contract is trading at eight-day intraday highs today after a US-led release of emergency oil reserve volumes undershot analyst expectations and possibly trigger a response from OPEC+.
The US will release 50 million bbls from its Strategic Petroleum Reserves (SPR) in an effort to dampen fuel prices and runaway inflation. 32 million bbls of this will by an exchange with four US SPR sites for oil delivered from next month to April 2022, and returned between 2022-2024. 18 million bbls will be pre-approved sales.
India and the UK have gotten behind the US reach-out by committing smaller volumes of 5 million bbls and 1.5 million bbls, respectively. Japan and South Korea are also looking at to release some stocks, with details to be confirmed.
China will release an undisclosed volume on its own terms, not willing to confirm whether it will be part of a joint effort.
A joint release was widely viewed as priced in by traders before the US announcement yesterday.
“The SPR noise over the last few weeks has been successful in seeing the market trade lower…Had it not been for this noise, it’s likely that the market would have continued to trend higher,” ING commodity strategists Warren Patterson says.
All eyes are now back on OPEC+ and whether the group will respond to the SPR release by holding back barrels during its next monthly output policy meeting on 2 December.
“The release of oil reserves is likely to see OPEC adjust its planned increases in output,” ANZ commodity strategist Daniel Hynes says.
Several OPEC+ delegates have told Argus Media and S&P Global Platts the US release is unlikely to change the group’s current course.