Bunker benchmarks in European and African ports have tracked Brent’s gains, and suppliers in Gibraltar brace for bad weather.

PHOTO: Aerial view of a cargo ship in transit in Istanbul, Turkey. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($5/mt), Gibraltar ($4/mt), and down in Durban ($1/mt) 
• LSMGO prices up in Gibraltar ($4/mt), Rotterdam ($1/mt), and down in Durban ($1/mt) 
• HSFO prices up in Rotterdam ($4/mt) and Gibraltar ($2/mt) 

Rotterdam's HSFO price has increased some in the past day. A prompt higher-priced HSFO stem fixed at $490/mt in the past day has contributed to push the benchmark up. Meanwhile, a lower-priced LSMGO stem fixed at $772/mt has partly capped gains in the product price in Rotterdam.

Prices across all bunker fuel grades have also increased moderately in Gibraltar, where availability is said to be normal. However, Gibraltar could face bunkering disruptions due to adverse weather conditions. The Gibraltar Port Authority has issued a gale force wind warning for today and tomorrow. Wind gusts are forecast to touch 40-45 knots, the port authority says. Rough weather is forecast in Gibraltar for the rest of the week. Five vessels are waiting for bunkers in Gibraltar today, a source says. 

Bunkering is progressing normally in Ceuta. Five vessels are due to arrive for bunkers today, up from three yesterday, says shipping agent Jose Salama & Co.  

Adverse weather is also forecast in Turkey’s Iskenderun Bay and Ceyhan region today, according to GAC Hot Port News. Bad weather conditions could complicate deliveries in Iskenderun, a source says.

Brent

The front-month ICE Brent contract gained $0.72/bbl on the day, to trade at $86.66/bbl at 09.00 GMT.

Upward pressure:

Brent futures have risen due to mounting supply concerns, driven by ongoing geopolitical tensions in the Middle East and between Russia and Ukraine.

The heightened tension follows the shutdown of a 70,000 b/d crude unit at Rosneft's Kuibyshev refinery in the Russian city of Samara after a Ukrainian drone attack on Saturday.

“Rosneft’s Kuibyshev oil refinery in Samara shut half its capacity after an attack,” ANZ Bank's senior commodity strategist Daniel Hynes noted. The recent drone attacks on Russian energy facilities led to a 7% decline in the country’s refining capacity, Saxo Bank’s chief China strategist Redmond Wong estimated.

In the Middle East, tensions escalated after a Houthi militia member warned Saudi Arabia and other US-allied nations in a televised interview, stating that any supporter of Israel would be considered a “legitimate target.”

The Russian government also instructed oil companies to reduce crude output in the second quarter to meet the 9 million b/d target set within the OPEC+ alliance, Reuters reported citing three sources.

“Several national officials indicated the [OPEC+] measures are successfully staving off any supply surplus” in the global oil market, Hynes added.

Downward pressure:

The United Nations Security Council (UNSC) adopted a resolution yesterday, urging an immediate ceasefire between Israel and Iran-aligned Hamas militants, also calling for the immediate release of all remaining Israeli hostages.

This development has alleviated some supply concerns in the global oil market, exerting downward pressure on Brent futures.

Meanwhile, oil market analysts are awaiting the release of US inflation data due later this week. The US Federal Reserve (Fed) is widely expected to postpone its interest rate cuts if the inflation remains at higher levels.

Higher interest rates may restrain global oil demand growth, as dollar-denominated commodities like oil become more expensive for non-dollar holders.

By Manjula Nair and Tuhin Roy

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