Regional bunker prices have mostly increased over the weekend, and bunkering is on standby in Algoa Bay.

PHOTO: Port of Ceuta, Spain. Getty Images

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

• VLSFO prices up in Durban ($28/mt), Gibraltar ($9/mt) and Rotterdam ($6/mt)
• LSMGO prices up in Durban ($17/mt) and Rotterdam ($9/mt), and down in Gibraltar ($3/mt)
• HSFO prices up in Rotterdam ($6/mt) and Gibraltar ($3/mt)

Trading activity is expected to be more muted today as the UK observes Spring Bank Holiday and Whit Monday in some European countries.

Most bunker benchmarks in European and African ports have gained over the weekend. But Gibraltar’s LSMGO price has defied Brent’s upward push by declining in the past two days. One lower-priced 500-1,500 mt LSMGO stem fixed on Friday has contributed to drag the port’s benchmark lower.

Securing VLSFO and LSMGO stems for very prompt dates (0-2 days) can be slightly difficult in Gibraltar Strait ports. Two suppliers in Gibraltar require lead times of at least 4-5 days. A bit of congestion has built up in Gibraltar today.

Six vessels are currently waiting to bunker in Gibraltar, according to port agent MH Bland. One supplier is experiencing delays of 8-12 hours due to a bunker barge not being ready, MH Bland says. Meanwhile, minimum congestion has been reported in Algeciras and Ceuta.  

Bunkering has been kept on standby in Algoa Bay today amid bad weather conditions, according to Rennies Ships Agency. Two vessels are currently waiting to receive bunkers at anchorage, and another two vessels are scheduled to arrive for bunkers today, Rennies says.

Brent

The front-month ICE Brent contract has increased by $0.80/bbl on the day from Friday, to $77.2/bbl at 09.00 GMT.

Upward pressure:

Brent futures gained after US President Joe Biden and House Speaker Kevin McCarthy reached a tentative agreement on Saturday to halt the $31.4 trillion debt ceiling for the next two years. The tentative deal is expected to avert US debt default and could be put to vote later this week.

“The tentative debt deal offered a relief rally in risk assets, including crude oil,” CMC market analyst Tina Teng told Reuters.

The US oil and gas rig count has gone down by 44 in May, the biggest drop since 2020, after energy firms in the US cut rigs for a fourth consecutive week, according to energy firm Baker Hughes.

“Things are tighter than they ever have been. Upside price risks abound as inventories are below average and demand continues to defy the skeptics,” said Phil Flynn, senior account executive of The Price Futures Group.

Downward pressure:

Meanwhile, investors will wait for the final outcome of vote on the proposed US debt ceiling deal. The US Treasury had warned that the country would run out of cash without a debt deal by 5 June.

Market participants will also wait for fresh cues from China's manufacturing and services data due to release this week. Brent has been betting on a robust economic rebound in China to fuel oil demand, but the data so far has signaled only a mild economic recovery.

By Nithin Chandran and Aparupa Mazumder

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