European and African bunker prices have mostly dropped with crude after a big stock build in the US, and several Mediterranean ports are experiencing supply issues.
Changes on the day to 08.00 GMT today:
- VLSFO prices down in Rotterdam ($7/mt), Gibraltar ($3/mt) and Durban ($2/mt)
- LSMGO prices down in Rotterdam and Durban ($9/mt) and Gibraltar ($7/mt)
- HSFO prices up in Gibraltar ($2/mt), and down in Rotterdam ($4/mt)
A supplier has run out of HSFO380 to supply off Malta, and expects resupply from 8-9 November. Only two suppliers have delivered HSFO380 stems off Malta since the IMO 2020 transition. The supplier’s earliest delivery date for VLSFO and LSMGO is 1-2 days out, depending on weather conditions.
Malta is currently experiencing weather disruptions with gale-force wind gusts hitting its islands from the south. Only Bunkering Area 1 off is operational, port agent MH Bland says. Bunkering Area 1 – one of Malta’s six offshore bunkering areas – is located off the main island’s north coast and is more sheltered from southward winds.
VLSFO supply has tightened in Portugal and the Gibraltar Strait after a key VLSFO-producing refinery in the region was forced to shut and run at lower run rates.
Portugal’s 225,000 b/d Sines refinery has been unable to ramp up runs after an atmospheric distillation unit came offline last month. The refinery’s hydrocracking unit, which can upgrade residual fuel oil to higher-value distillates and low sulphur fuel oils, has also been offline.
VLSFO production from the refinery is only expected to normalise towards the end of the year, sources say. Certain suppliers in Gibraltar have been unable to source cargoes from the refinery to replenish stocks and supply is tight.
Brent
Front-month ICE Brent has extended its decline by shedding $0.91/bbl on the day to 08.00 GMT, when it traded at $82.43/bbl.
Traders await signals from today’s OPEC+ meeting for price direction. Brent has traded down this week amid expectations that the group will stay on its current path of increment monthly 400,000 b/d output increases.
An expert committee advising OPEC+ kept its supply-demand forecast largely unchanged for the remainder of the year. Member states Saudi Arabia, Kuwait, Iraq and Angola have reiterated support for the status quo, seeing no major changes giving grounds for a supply hike, despite renewed calls from US President Biden to open the taps wider to cool prices.
Brent has also seen headwind from a bigger-than-expected weekly build in US crude inventories, and from a heightened possibility that Iran nuclear negotiations could resume.
Negotiations have been put on ice since Iran’s President Ebrahim Raisi was elected in July, amid scepticism from both sides. A resumption of negotiations is slotted in for 29 November, and could pave the way for the US to lift sanctions on about 1.5 million b/d of Iranian crude.
Iran’s chief negotiator for the talks, Ali Bagheri Kani, confirmed the meeting after speaking to EU envoy Enrique Mora.
“In a phone call with @enriquemora_, we agreed to start the negotiations aiming at removal of unlawful & inhumane sanctions on 29 November in Vienna,” he tweeted yesterday.