Rotterdam’s bunker prices have dropped sharply amid declining Brent values, and fuel oil supply has tightened in the port.
Changes on the day to 08.00 GMT today:
- VLSFO prices up in Durban ($1/mt), and down in Rotterdam ($18/mt) and Gibraltar ($6/mt)
- LSMGO prices steady in Durban, and down in Rotterdam ($9/mt) and Gibraltar ($1/mt)
- HSFO prices up in Durban ($3/mt), and down in Gibraltar ($19/mt) and Rotterdam ($13/mt)
Longer lead times should be considered for HSFO380 stems in Rotterdam after supply tightened last week. Prompt product is more difficult to source, especially for larger quantities.
Backwardation in Rotterdam’s forward curves for HSFO380 and VLSFO could have made it less lucrative to store product over time. ARA’s independent fuel oil inventories fell to three-month lows of 6.52 million bbls last week, according to Insights Global estimates. There was far less fuel oil stored in the bunkering hub than on average over the past five years.
There are slight bunker delays in the Gibraltar Strait this morning, port agent MH Bland says. Two suppliers in Gibraltar are running 1-3 hours behind schedule. Delays have mounted in Algeciras, with two suppliers 2-8 hours behind, and one supplier around half a day behind.
Bunkering has been suspended across all of Malta’s offshore bunkering areas today. Operations were halted in most areas when the weather worsened yesterday. Strong winds and high swells are expected off Malta until Friday, and may divert vessels with options to bunker in Gibraltar and other ports instead.
The wind direction is forecast to switch from easterly to westerly as the winds calm through Friday, and could enable suppliers to deliver stems in more sheltered bunkering area off Malta’s east coast then.
Brent
Front-month ICE Brent has extended its losses, shedding $0.39/bbl on the day to 08.00 GMT today, when it stood at $85.28/bbl.
US crude stocks gained 2.32 million bbls in the week to 22 October, indicative figures from the American Petroleum Institute (API) showed yesterday. That surpassed the 1.65 million-bbl build expected by analysts polled by Oilprice.com, and put downward pressure on Brent. US crude inventories have been growing for five straight weeks, according to the API.
Official US data from the Energy Information Administration (EIA) is set for release at 14.30 GMT today. A larger-than-expected build for these could weigh further on Brent.
Brent started the day trading above $86/bbl, and near multi-year highs, after Saudi Aramco yesterday warned of a larger oil supply deficit if Covid-19 concerns wither and more people fly again next year. Its chief executive Amin Nasser told Bloomberg that “spare capacity is shrinking”.
“It’s now getting to a situation where there’s limited supply — whatever is left that’s spare is declining rapidly.”
In its latest forecast, OPEC+ estimated that the global supply-demand balance will swing to a surplus from next year. The group has so far been unwilling to phase back oil supply cuts it made last year at a faster pace than 400,000 b/d per month, despite calls to pump