Global bunker prices are sharply down with Brent amid concerns over dented Chinese fuel demand, and a stronger US dollar.
Changes on the day to 08.00 GMT today:
- VLSFO prices down in Gibraltar ($21/mt), Rotterdam ($19/mt), Singapore and Fujairah ($15/mt) and Houston ($1/mt)
- LSMGO prices down in Singapore and Gibraltar ($27/mt), Rotterdam ($25/mt), Fujairah ($12/mt) and Houston ($7/mt)
- HSFO380 prices down in Singapore and Fujairah ($17/mt), Houston ($12/mt), Rotterdam ($9/mt) and Gibraltar ($6/mt)
Three suppliers are delayed by 2-8 hours across Gibraltar and Algeciras, and one vessel is waiting for a bunker barge to get ready in Gibraltar this morning, says port agent MH Bland. There are no delays in Ceuta.
Gibraltar’s VLSFO price has flipped to an unusual $2/mt discount to Rotterdam. Rotterdam normally has the grade around $15-25/mt lower than in Gibraltar, but competitive pricing from certain suppliers in the Mediterranean hub has kept their prices at similar levels in recent weeks.
HSFO380 remains considerably higher-priced in Gibraltar, however, with around $40/mt down to Rotterdam. As Gibraltar’s HSFO380 price is relatively stronger than its VLSFO, the port’s Hi5 spread has narrowed to $55/mt. This compares to spreads of $99/mt in Rotterdam and $120/mt in Singapore.
At $61/mt, Fujairah’s Hi5 spread is also narrow compared to Rotterdam and Singapore. Fujairah’s HSFO380 price has surged on tighter availability since July, after a supplier carrying the grade exited the market. The price flipped to a premium over Singapore in mid-July, and the premium has since shot up to $55/mt.
Around 12 days of lead time is required for HSFO380 stems in Fujairah now, compared to 7-9 days in Singapore and 2-3 days in the ARA and Gibraltar Strait.
HSFO380 availability has improved in Houston to lessen the recent price pressure. Its $25/mt premium over Balboa from last week has been halved to $12/mt.
Anchorage bunkering in Port Elizabeth is likely to be disrupted today, with high swell of over 3 metres forecast is forecast until this evening.
“A short period of increased wind speeds are expected on 09.08.21 however conditions are forecasted to subside relatively quickly which will allow for bunker operations to continue PM hours on 09.08.21 agw wp,” shipping agent Sturrock Grindrod says.
Brent
Front-month ICE Brent crude has slumped $3.30/bbl lower on the day since Friday, to $68.33/bbl at 08.00 GMT today.
Concerns over the rapid spread of the Delta Covid-19 variant, denting fuel demand in China and other countries, have triggered a big selloff of the futures contract.
New daily cases hit another multi-month high of 125 in China on Friday. Chinese authorities are taking no chances, cancelling flights, and travel in and out of 46 cities to curb the spread.
Chinese oil data from July was also weaker than expected, according to Reuters. Crude oil imports fell slightly and averaged below 10 million b/d for a fourth consecutive month. The recent growth in oil product exports slowed following rising Covid-19 cases and floods.
“The declining pace of China imports released over the weekend, which featured a massive fall in crude imports, has darkened the mood further in Asia today. Markets are also nervously watching the track of delta-variant Covid-19 on the mainland, where lockdowns and travel restrictions already in place have oil traders on edge,” OANDA market analyst Jeffrey Halley said today.
Optimism over US jobs numbers published on Friday has been countered by a rallying US dollar, which makes dollar-denominated commodities like Brent less attractive to investors.