Most bunker benchmarks in European and African ports have dropped over the weekend, and bunker fuel availability is good in the ARA.

PHOTO: Ship in dock at sunset in the Port of Zeebrugge in Belgium. Getty Images

Changes on the day, from Friday to 09.00 GMT today:

• VLSFO prices down in Durban ($12/mt), Gibraltar ($3/mt) and Rotterdam ($1/mt) 
• LSMGO prices up in Rotterdam ($4/mt), and down in Gibraltar ($6/mt) and Durban ($2/mt) 
• HSFO prices down in Gibraltar ($4/mt) and Rotterdam ($2/mt)

Rotterdam’s LSMGO price has moved counter to the wider market direction and gained some over the weekend. LSMGO availability has been good in Rotterdam and in the wider ARA hub, with lead times of 3-5 days advised by traders.

Both VLSFO and LSMGO prices in Gibraltar have declined over the weekend. Two lower-priced prompt delivery stems were fixed in the port on Friday, one each for LSMGO and VLSFO. Gibraltar’s LSMGO premium over Rotterdam's has narrowed by $10/mt to $61/mt now. Five vessels are waiting to receive bunkers in Gibraltar today, a source said. 

In the Canary Islands’ port of Las Palmas, one 50-150 mt lower-priced LSMGO stem fixed at $794/mt for non-prompt delivery has contributed to the $7/mt decline. Las Palmas’ LSMGO is currently trading at a $10/mt premium over Gibraltar's LSMGO. 

Durban’s VLSFO price has dropped significantly over the weekend. A 150-500 mt lower-priced VLSFO stem fixed at $678/mt for non-prompt delivery on Friday has contributed to drag the benchmark lower. 

Brent

The front-month ICE Brent contract moved $0.61/bbl higher on the day from Friday, to trade at $84.01/bbl at 09.00 GMT.

Upward pressure:

Concerns about disruptions in oil supply in the Middle East escalated amid growing fears of political instability in Iran.

Brent futures moved higher following the news of Iran’s President Ebrahim Raisi’s death in a helicopter crash on Sunday. This news has sparked fear about a broader geopolitical ramification in the global oil market and supported Brent.

In the latest series of attacks Iran-backed Houthi forces struck M/T Wind, a Panamanian-flagged, Greek-owned and operated oil tanker with a missile on 18 May, US Central Command reported. The oil tanker was most recently docked in Russia and headed for China.

“The risk of supply disruptions will be on the agenda when OPEC meets in two weeks,” ANZ Bank’s senior commodity strategist Daniel Hynes wrote. “We expect the [OPEC+] group to extend the 2.2 million b/d voluntary cuts until the end of the year,” he added.

The Saudi Arabia-led coalition is expected to meet in June to discuss oil output policies, but the official date of the ministerial meeting has not been announced.

Downward pressure:

Prospects of rising non-OPEC oil supply combined with a potential slowdown in demand have capped sharp gains in Brent’s price.

The International Energy Agency (IEA) has revised downward its 2024 forecast for global oil demand. It now expects world oil demand to grow by 1.1 million b/d in 2024, a decrease of 140,000 b/d from its earlier estimate.

The IEA expects global oil output to grow by 580,000 b/d to 102.7 million b/d in 2024, with non-OPEC countries including the US, Guyana, Brazil, and Canada leading the production.

By Manjula Nair and Aparupa Mazumder

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