Bunker prices in Europe and Africa have slumped with Brent amid fresh Covid-19 concerns, and bunker deliveries have been delayed by unfavourable weather conditions in Mediterranean ports.
Changes on the day to 08.00 GMT today:
- VLSFO prices down in Durban ($23/mt), Gibraltar ($20/mt) and Rotterdam ($12/mt)
- LSMGO prices down in Durban ($37/mt), Gibraltar ($23/mt) and Rotterdam ($18/mt)
- HSFO prices down in Gibraltar ($16/mt) and Rotterdam ($12/mt)
Winds and swells from the south and west suspended bunkering in all of Malta’s offshore bunkering areas yesterday. Bunkering Area 1 off Malta’s northeast coast is more sheltered easterly swells and has become operational again.
Wind speeds are set to intensify off Malta over the weekend, with gale forecast on Monday, before calmer conditions on Wednesday 1 December. Delays are expected and several suppliers are quoting early December as their earliest delivery dates.
Weather disruptions are also expected at anchorages in Las Palmas and Tenerife today and into the middle of next week. Bunker barges are standing by at berth across the ports, local port agent MH Bland says.
Gibraltar Strait ports have minimal congestion and calm weather forecast until Saturday. Fuel availability is steady with 2-3 days of lead time required, which is similar to ARA ports.
Gibraltar’s bunker prices have dropped $4-6/mt against Rotterdam’s in the past day. Gibraltar continues to price HSFO380 ($54/mt) and LSMGO ($67/mt) at wide premiums over Rotterdam, while its VLSFO ($26/mt) premium has narrowed considerably.
Brent
Front-month ICE Brent has slumped $3.41/bbl lower on the day, to $78.71/bbl at 08.00 GMT.
Brent has come off sharply as investors grow wary of the rapid spread of a new, likely more transmissible Covid-19 variant. Vaccines are said to be less effective against this yet unnamed variant that has ripped through South Africa to become the dominant strain. Several countries, including the UK and Singapore, have banned flights from South Africa and its neighbouring countries in an attempt to contain its spread.
Brent is heading for a slight $0.18/bbl drop on the week, weighed down by expectations of a bigger oil surplus building early next year than previously thought. OPEC’s advisory board said the release of 70 million bbls from strategic petroleum reserves announced by the US and other major oil-consuming countries this week could tilt the global supply-demand balance towards a larger surplus in January and February than previously thought.
“We expect the OPEC+ alliance will suspend its scheduled 400kb/d increase for January at its meeting next week. This would buffer the market from headwinds to demand, such as renewed travel restrictions as a new wave of the pandemic hits Europe and the US”, says ANZ commodity strategist Daniel Hynes.
An OPEC+ suspension will bring the market back into a deficit in the first quarter next year, ANZ estimates.